Goldcorp Revenues Increase 62%
VANCOUVER, July 27, 2011 /CNW/ --
Toronto Stock Exchange: G New York Stock Exchange: GG
(All Amounts in $US unless stated otherwise)
VANCOUVER, July 27, 2011 /CNW/ - GOLDCORP INC. (TSX: G) (NYSE: GG) today reported operating cash flows before working capital changes(1) of $717 million for the second quarter of 2011 based on gold production
of 597,100 ounces at a total cash cost(2) of $185 per ounce. Adjusted net earnings from continuing operations(3) in the quarter increased to $420 million, or $0.52 per share, compared to $199 million, or $0.27 per share, in the second quarter of 2010. Reported net earnings from
continuing operations were $489 million compared to $524 million in the second quarter of 2010.
Second Quarter 2011 Highlights
-- Revenues increased 62% over the 2010 second quarter, to $1.3
billion, on gold sales of 606,400 ounces.
-- Operating cash flow before working capital changes increased
84% over the 2010 second quarter, to $717 million or $0.90 per
share.
-- Adjusted net earnings increased 111% over the 2010 second
quarter, to $420 million or 0.52 per share.
-- Average realized gold price increased 25% over the 2010 second
quarter, to $1,516 per ounce.
-- Cash costs totaled $185 per ounce on a by-product basis and
$553 per ounce on a co-product basis.
-- Dividends paid amounted to $82 million.
-- Quarter end cash balance of $1.4 billion; net cash position of
$516 million.
-- Added to the NASDAQ OMX CRD Global Sustainability Index.
'Due to strength throughout our mine portfolio in the first half of 2011
as well as steady progress on the development of our next generation of
gold projects, Goldcorp's long-term growth profile remains intact,'
said Chuck Jeannes, Goldcorp President and Chief Executive Officer.
'Our primary focus over the balance of the year is on the continued
ramp-up at Peñasquito. Nine months after mine commissioning, we
continue to see impressive sequential quarterly gains in metals grades,
recoveries and production, and both 50,000 tonne-per-day processing
lines have now exceeded nameplate capacity on numerous occasions. The
high pressure grinding roll circuit to increase designed throughput
from 100,000 tonnes per day to 130,000 tonnes per day has been
commissioned, but low pebble generation in the SAG mills continues to
challenge efforts to feed that circuit at designed capacity. In
addition, the limited availability of material required to raise the
tailings dam embankment contributed to inadequate quantities of reclaim
water necessary for full-capacity operation of the milling circuit. We
expect to resolve both issues by the end of 2011 and Peñasquito
production in 2012 and beyond is not expected to be impacted by these
issues. Looking ahead to the balance of the year, these developments at
Peñasquito, combined with an expected shortfall at the Pueblo Viejo
joint venture due to previously reported flooding issues and a small
reduction at Musselwhite due to forest fires have led us to revise 2011
production guidance.
'Goldcorp remains well-positioned to benefit from near-record high
metals prices. Effective cost containment is blunting the effect of
industry cost pressures, and continued strong by-product metals prices
have led to improved cash costs for 2011. Our portfolio of young,
prospective mines continues to deliver the best gold margins in the
industry and our advancing project pipeline will drive our 60% growth
in gold production over the next five years.'
2011 Guidance Summary
Mining at Peñasquito in the second quarter continued to progress into
the heart of the sulphide ore body. Higher grades and recoveries of
gold, silver, lead and zinc were offset by lower processing rates due
to lower than forecast pebble (oversize) feed to the high pressure
grinding roll (HPGR) circuit, and slower-than-expected progress on the
raising of the tailings dam embankment. In addition, restricted
cyanide deliveries due to supplier production issues is expected to
lead to delayed oxide gold production from the Peñasquito heap leach
operation in the second half of the year. Total 2011 gold production
at Peñasquito is now expected to be 250,000 ounces compared to previous
guidance of 350,000 ounces.
At the Pueblo Viejo project in the Dominican Republic, 60% owner and
joint venture operator Barrick announced in May significant damage to
the starter dam at the tailings facility due to a major rainfall event,
resulting in a delay in first gold production until mid-year 2012.
Goldcorp is forecasting no gold production from Pueblo Viejo in 2011
versus previous expectations of 50,000 ounces.
On July 14(th), the Company announced that forest fires in northwest Ontario had
affected operations at Musselwhite mine. A small rotating crew of
Musselwhite mine personnel worked in coordination with provincial
firefighting authorities to prevent damage to surface infrastructure as
a result of the fires, but the evacuation and power disruptions due to
damaged transmission lines will result in an estimated impact to 2011
production of approximately 20,000 ounces. The mine is expected to be
back to regular operation within the next several days and the Company
recognizes the efforts of mine personnel and the provincial
firefighters from across Canada who have managed a very challenging
situation amid extreme conditions.
Taken together, these factors are expected to result in a reduction in
2011 gold production to between 2.50 million and 2.55 million ounces
compared to previous guidance of between 2.65 million and 2.75 million
ounces. Continued success in cost containment throughout the
organization in light of inflationary pressures as well as strong
by-product metals prices have contributed to improved 2011 guidance on
cash costs, now expected to be between $180 and $220 per ounce of gold
on a by-product basis, compared to previous guidance of between $280
and $320 per ounce. Due to the lower production from Peñasquito,
co-product cash costs for the year are now anticipated to be between
$500 and $550 per ounce, compared to between $475 and $500 per ounce
previously.
Ongoing exploration success at the Company's mines and projects has
resulted in a $50 million increase in the 2011 exploration budget, to
$225 million. Those assets receiving significant increases include an
additional $10 million each at Cerro Negro and Porcupine. The largest
potential increase is at El Morro, where the receipt of permits would
enable the exploration of regional targets with strong potential
upside. Red Lake and Los Filos will also receive meaningful increases
and both remain well-positioned to replace or increase gold reserves in
2011.
Financial Review
Gold sales in the second quarter were 606,400 ounces on production of 597,100 ounces. This compares to sales of 577,500 ounces on production of 588,600 ounces in the second quarter of 2010. Total cash costs were $185 per
ounce of gold on a by-product basis. On a co-product basis, cash costs
were $553 per ounce.
Reported net earnings from continuing operations in the quarter were
$489 million compared to $521 million in the second quarter of 2010. Adjusted net earnings from
continuing operations in the second quarter totaled $420 million, or $0.52 per share, compared to $199 million or $0.27 per share, in the second quarter of 2010. Adjusted net earnings
primarily exclude the gains from the foreign exchange translation of
future income tax liabilities, the three mark to market gains relating
to the exercise of the share purchase warrants, 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 $31 million or $0.04 per share for the quarter. Operating cash flow before changes in
working capital was $717 million compared to $390 million in last year's second quarter. Gold margin(4) was $1,331 per ounce of gold sold.
Mexico
Gold and silver production at Peñasquito was 58,400 and 4,602,300
ounces, respectively, for the second quarter. Lead and zinc production
totaled 38.5 million pounds and 66.5 million pounds, respectively.
Second quarter gold production from sulphide ore increased 6% over the
first quarter of 2011 to 43,100 ounces.
Peñasquito's focus during the second quarter was the routine operation
of the High Pressure Grinding Roll (HPGR) portion of the circuit: the
final step in bringing the plant's throughput to its design capacity.
The quantity of ore milled decreased by 7% compared to the first
quarter, however, as commissioning efforts identified two primary
operating issues.
-- The primary SAG mill grinding circuits were not generating the
quantity of pebbles that were indicated by original
pre-construction test work, thereby limiting the feed to the
HPGR circuit, and
-- The tailings dam embankment raise was not occurring at the rate
necessary to provide adequate water storage capacity to meet
the demand for water for full operation of the milling circuit.
Oxide ore gold production amounted to 15,300 ounces in the second
quarter which was 10% lower than the previous quarter. Reduced oxide
ore quantities were anticipated by the mine plan in the current
transition zone and restricted cyanide deliveries were experienced
during the quarter due to flooding at DuPont's manufacturing facility
in Tennessee. The limited quantities of cyanide available to Goldcorp's
Mexican operations were directed to Los Filos where higher grade ore
yields higher production results from the same cyanide consumption.
Total material mined in the second quarter decreased by 12% in
comparison to the first quarter 2011 due to an increase in the amount
of ore reclaimed from stockpiles and increased waste haul distances
involved with hauling mine waste rock to the tailings storage facility
to supplement the embankment construction material. In conjunction
with the positioning of mine waste within the tailing facility
embankments, additional water supplies are being added to eliminate
current and future shortfalls from water retention issues.
Cash costs for the second quarter of 2011 amounted to negative $801 per
ounce which was 46%, or $687 per ounce higher than in the prior quarter
due to lower by-product credits, a stronger Mexican peso and higher
operating costs. The increase in direct costs of $13 million was due to
higher employee costs associated with annual labor payments, increased
blasting costs and various non-recurring costs associated with the HPGR
ramp up activities. During the second quarter the company continued to
build an inventory of run-of-mine ore for use once the mill ramp up has
been completed.
Adequate power has been installed in the grinding and HPGR circuits,
such that the pebble generation issue can be circumvented by providing
supplemental feed which by-passes the SAG mills. A $30 million project
has commenced to bring the supplemental ore feed system into operation
by year-end such that, allowing for its commissioning, 130,000
tonne-per-day throughput will be achieved by the end of the first
quarter of 2012.
During the second quarter of 2011 exploration drilling at Peñasquito
continued on the manto deposits to the east of the current pit.
Permits have been received for starting a shallow grid drilling program
to test additional targets close to the current pit.
A strong performance during the quarter at Los Filos resulted in gold
production of 83,500 ounces at total cash costs of $438 per ounce.
Construction of the fourth stage of the heap leach pad was completed
during the quarter as scheduled. In addition a 15% increase to
throughput capacity at the processing facility was completed which will
provide additional solution processing capacity during the upcoming
rainy season.
The 2011 exploration program continues to progress with the objective of
proving the extension of the Los Filos deposit towards the 4P area and
El Bermejal to the south. Results to date are positive in proving both
extensions.
Canada
At Red Lake in Ontario, second quarter gold production was 154,900
ounces at a total cash cost of $352 per ounce. Exploration drilling
continued throughout the quarter from the 4199 ramp and the
interconnection drift to extend the High Grade Zone below the 52 level
with positive results. Additionally, a significant amount of
exploration and development is continuing to bring the Upper Red Lake
Complex, the Far East Zone and the Footwall Zones into sustained
production, both as alternate sources of ore and to complement the
'fill the mills' program.
At Porcupine in Ontario, gold production during the second quarter
totaled 62,300 ounces at a total cash cost of $710 per ounce. The
Hoyle Pond Deep project advanced during the second quarter with
continued work on lateral development underground finishing major
excavation for the hoist rooms and shaft access. Additionally,
foundations were laid for the surface hoist and a pilot raise was
completed to align the shaft in preparation for sinking operations
later in 2011. The key component of the construction involves a new 5.5
metre diameter deep winze (shaft) commencing on the 355 metre level and
extending to a total depth of 2,200 metres below surface.
Gold production at Musselwhite during the second quarter totaled 58,800
ounces at a total cash cost of $767 per ounce. Exploration continued
to focus on the surface and underground extension of the Lynx Zone.
The results from this drilling activity will be used to support
engineering work and confirm economics of a long term ore handling
solution. The underground program has extended the Lynx resource 125
metres north and 50 metres south of the 2010 Reserve boundary, with
results consistent with earlier drilling. The mineralization remains
open along strike and up and down dip.
Progress in Guatemala
At Marlin gold production was 78,900 ounces at a total cash cost of
negative $368 per ounce. Silver production was 1,896,400 ounces.
Gold and silver production was 1% and 7% higher, respectively, than
first quarter 2011.
On May 24, 2010, the Inter-American Commission on Human Rights
('IACHR'), an independent body of the Organization of American States,
issued precautionary measures calling on the Government of Guatemala to
take action, including suspension of mining activity at Marlin, to
protect 18 Mayan communities against alleged environmental and public
health concerns related to the mine's operation. On July 8, 2011, the
Guatemalan Ministry of Energy and Mines issued a resolution declaring
that based on the information presented by the agencies of government,
the petitioner, the local communities, and Marlin mine, there is no
cause for the suspension of operations at Marlin and that it has been
carrying out mining operations in accordance with the mining law of
Guatemala. The Ministry's resolution is available on its webpage at: http://www.mem.gob.gt/Portal/home.aspx. On July 11, 2011, the Presidential Commission on Human Rights
(COPREDEH), on behalf of the Government of Guatemala, petitioned the
IACHR to declare the precautionary measures without further effect.
The basis for the petition is that the government has complied with the
measures and that the investigations conducted by the government
demonstrate that Marlin has not damaged the environment or health of
the communities in the vicinity of the mine. The petition, which is
published on COPREDEH's webpage at http://copredeh.gob.gt/index.php?showPage=972, cites a MEM report which states that 'no proof exists that there
exists any situation presenting a threat of serious or imminent harm to
persons or that there exists a probability that any damage will
materialize and therefore there does not exist a situation of extreme
seriousness or urgency to avoid irreparable harm to persons as a result
of operations at the Marlin Mine.' The IACHR's next period of sessions
at which working meetings and hearings will be held is scheduled for
October 19 - November 4, 2011.
Advancing the Project Pipeline
At the Cerro Negro project in Argentina, the Eureka decline continues to
advance, reaching a length of 1,215 metres during the quarter out of a
4,000 metre total. During the second quarter the underground
development for the first vertical vent raise was completed as well as
access road upgrades, geotechnical evaluations of the plant and
tailings areas, camp expansion and power line design and routing
studies. Exploration drilling ramped up dramatically in the second
quarter of 2011 with a total of 39,823 metres of core produced as
compared to 8,772 metres drilled during the first quarter. By the end
of the second quarter, there were eight surface drills operating and
two additional drill rigs are expected to be added in the second half
of 2011. The immediate focus of drilling is on expansion of the Mariana
Central, Mariana Norte and San Marcos veins, all of which remain open
along strike. Reserve additions from these three veins have the
potential to augment the near-term production profile at Cerro Negro.
At the Éléonore project in Quebec, infill surface diamond drilling
continued with a total of 25 kilometers completed for the year. An
update to the geological model has been initiated, with completion
expected in the fourth quarter of 2011. An additional 10 kilometres of
drilling is scheduled and will focus on the central portion of the ore
body to upgrade inferred mineral resources and on the northern portion
of the deposit, where high grade results have been previously
intersected and show potential for additional mineral resources.
Construction of the exploration ramp began on April 9, 2011 and has now
advanced 180 metres in length and is progressing toward the 650-meter
level. The ramp will provide drilling locations along the ore body to
help better define the resource. On June 30, 2011, the exploration
shaft reached a depth of 351 metres and remains on schedule with
completion targeted for the second quarter of 2012.
Detailed engineering of the production shaft and related infrastructure
is underway, as is the preparation of site pre-construction items
including the main access road, permanent bridges, a 120kV sub-station,
the construction camp, the upgrade of waste water pond, and waste pad
expansion. The basic design study for a 7,000 tonne per day processing
plant has also been completed. The project remains on track to receive
the Environmental and Social Impact Assessment (ESIA) permit in the
third quarter of 2011 which will allow construction to commence.
At the Pueblo Viejo project in the Dominican Republic, overall
construction is now more than 70% complete. A major rainfall event that
occurred in May requires remediation of damage to the partially
constructed starter tailings dam facility and as a result, first
production is now anticipated in mid-2012, subject to the receipt of
new tailings permit approvals. The unanticipated remediation work and
impact on the schedule has resulted in mine construction capital
increasing to $3.6-$3.8 billion (100%), or $1.4-$1.5 billion
(Goldcorp's 40% share) of which about 75% had been committed at the end
of the second quarter. Goldcorp's share of annual gold production in
the first full five years of operation is expected to average
415,000-450,000 ounces at total cash costs of between $275 and $300 per
ounce(5).
At the end of the second quarter, three of the four autoclaves had been
brick-lined and the remaining autoclave is more than 70% complete.
About 90% of the planned concrete has been poured, approximately 90% of
the steel has been erected and more than 4.8 million tonnes of ore have
been stockpiled. Work continues toward achieving key milestones
including the connection of existing grid power to the site. As part
of a longer-term, optimized power solution for Pueblo Viejo, a plan is
being advanced to build a dual fueled power plant at an estimated
incremental capital cost of about $0.3 billion (100% basis) or $0.12
billion (Goldcorp's 40% share) that would commence operations utilizing
heavy fuel oil (HFO) power but have the ability to subsequently convert
to cheaper liquid natural gas (LNG). The new plant is expected to
provide lower cost, long term power to the project.
At Cochenour in Ontario, work continued on the old Cochenour shaft and
the first phase of widening began on July 2(nd). On surface, the shaft sinking winch foundation was poured. The hoist
complex architectural and mechanical contractors mobilized to site and
began installation. The Cochenour Red Lake Haulage Drift continued to
advance and at the end of the second quarter was 29% complete. Surface
exploration drilling continued and in addition to the four drills
working on delineating and expanding the resource at Cochenour, two
drills have been mobilized into the Cochenour Red Lake Haulage Drift to
begin to test the potential of this underexplored area.
Exploration and development work continued at Camino Rojo, an
advanced-stage district project near Peñasquito. Drilling continued
with a total of 15,335 metres drilled, including six validation core
holes in the Represa resource, twenty-two resource expansion and infill
core holes, ten condemnation holes in anticipation of site facilities,
and fifty shallow RAB-style holes. Trenching and channel sampling
were completed to define bulk samples for metallurgical column tests.
At Noche Buena another advanced-stage district project near Peñasquito,
exploration drilling commenced during the quarter with three drills
working to define high grade zones within the low grade deposit.
Initial results show structurally controlled higher grade
mineralization trends have been identified with follow-up drilling
planned to in-fill along these trends.
At the El Morro project in Chile, following the approval of the
Environmental Impact Assessment ('EIA') on March 14, 2011, construction
permits dealing with rezoning, flora, fauna and archaeology are in
process. Studies continue 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 is on track
to be completed in the third quarter and any changes will be
incorporated into that study. An existing access road was extended by
18 kilometres to the property. This access is being used to provide
consumables and equipment for the condemnation drilling activities
which began on site in June.
Corporate Responsibility, Safety & Health
Goldcorp was pleased to be recognized as a global leader for its
responsible business practices during the quarter when it was added to
the NASDAQ OMX CRD Global Sustainability Index.
In May 2011, Goldcorp published its 2010 Sustainability Report. This is
the fourth year that Goldcorp has reported against the key performance
indicators set out by the internationally recognized Global Reporting
Initiative (GRI). The 2010 report can be viewed online at http://goldcorp.com/corporate_responsibility/reports/.
This release should be read in conjunction with Goldcorp's second
quarter 2011 financial statements and MD&A report on the Company's
website, www.goldcorp.com, in the 'Investors' section under 'Financials'.
A conference call will be held on July 28, 2011 at 10:00 a.m. (PDT) to
discuss the second quarter results. Participants may join the call by
dialing toll free 1-800-355-4959 or 1-416-695-6617 for calls from
outside Canada and the US. A recorded playback of the call can be
accessed after the event until August 28, 2011 by dialing
1-800-408-3053 or 1-905-694-9451 for calls outside Canada and the US.
Pass code: 8153144. 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.
(1) Operating cash flows before working capital changes
is a non-GAAP performance measure which the Company
believes provides a better indicator of the
Company's ability to generate cash flows from its
mining operations.
Cash provided by operating activities reported in
accordance with GAAP was $330 million and $916
million for the three and six months ended June 30,
2011, respectively.
(2) The Company has included non-GAAP performance
measures, total cash costs, by-product and
co-product, per gold ounce, throughout this
document. The Company reports total cash costs on a
sales basis. In the gold mining industry, this is a
common performance measure but does not have any
standardized meaning. The Company follows the
recommendations of the Gold Institute Production
Cost Standard. 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, it
is 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. Total cash costs on a
by-product basis are calculated by deducting
by-product copper, silver, lead and zinc sales
revenues from production cash costs.
Commencing in 2011, production costs are allocated
to each co-product based on the ratio of actual
sales volumes multiplied by budget metals prices of
$1,250 per ounce of gold, $20 per ounce of silver,
$3.25 per pound of copper, $0.90 per pound of lead
and $0.90 per pound of zinc, rather than realized
sales prices. Using actual realized sales prices,
the co-product total cash costs would be $535 per
gold ounce for the three months ending June 30,
2011. Refer to page 38 of the 2011 second quarter
MD&A for a reconciliation of total cash costs to
reported production costs.
(3) Adjusted net earnings and adjusted net earnings per
share are non-GAAP measures. The Company believes
that, in addition to conventional measures prepared
in accordance with GAAP, the Company and certain
investors use this information to evaluate the
Company's performance. Accordingly, it is 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. Refer to page 39 of the 2011 second quarter
MD&A for a reconciliation of adjusted earnings to
reported net earnings.
(4) The Company has included a non-GAAP performance
measure, margin per gold ounce, throughout this
document. The Company reports margin on a sales
basis. 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, it is 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.
___________________________________________________________
|(in $ millions, except where noted) | Q2'11 |
|___________________________________________________|_______|
|Revenues per Financial Statements | $1,323|
|___________________________________________________|_______|
|Treatment and refining charges on concentrate sales| $33|
|___________________________________________________|_______|
|By-product silver and copper sales and other | $(437)|
|___________________________________________________|_______|
|Gold revenues | $919|
|___________________________________________________|_______|
|Divided by ounces of gold sold |606,400|
|___________________________________________________|_______|
|Realized gold price per ounce | $1,516|
|___________________________________________________|_______|
|Deduct total cash costs per ounce of gold sold(1) | $185|
|___________________________________________________|_______|
|Margin per gold ounce | $1,331|
|___________________________________________________|_______|
(5) Based on gold price and oil assumptions of
$1,300/oz and $100/bbl, respectively.
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 economical 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, 2010 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.
SUMMARIZED FINANCIAL RESULTS
(in millions of United States dollars, except per
share and per ounce amounts)
Three Months Ended
June 30
2011 2010
Revenues $1,323 $815
Gold produced (ounces) 597,100 588,600
Gold sold (ounces) 606,400 577,500
Copper produced (thousands of pounds) 28,000 28,000
Copper sold (thousands of pounds) 26,400 36,500
Silver produced (ounces) 6,498,700 4,636,500
Silver sold (ounces) 6,755,100 1,424,500
Lead produced (thousands of pounds) 38,500 22,200
Lead sold (thousands of pounds) 41,200 -
Zinc produced (thousands of pounds) 66,500 34,500
Zinc sold (thousands of pounds) 60,300 -
Average realized gold price (per ounce) $1,516 $1,208
Average London spot gold price (per ounce) $1,506 $1,197
Average realized copper price (per pound) $4.15 $2.55
Average London spot copper price (per pound) $4.15 $3.18
Average realized silver price (per ounce) $30.65 $18.54
Average London spot silver price (per ounce) $37.97 $18.33
Average realized lead price (per ounce) $1.15 -
Average London spot lead price (per ounce) $1.16 $0.88
Average realized zinc price (per ounce) $1.03 -
Average London spot zinc price (per ounce) $1.02 $0.92
Total cash costs - by-product (per gold ounce) $185 $359
Total cash costs - co-product (per gold ounce) $553 $436
Production Data:
Red Lake gold mines : Tonnes of ore milled 201,500 221,900
Average mill head grade 24.57 23.52
(grams per tonne)
Gold ounces produced 154,900 159,000
Total cash cost per ounce - $352 $308
by-product
Porcupine mines : Tonnes of ore milled 1,015,400 1,028,100
Average mill head grade 2.12 2.17
(grams per tonne)
Gold ounces produced 62,300 67,000
Total cash cost per ounce - $710 $548
by-product
Musselwhite mine : Tonnes of ore milled 334,600 357,900
Average mill head grade 5.73 5.39
(grams per tonne)
Gold ounces produced 58,800 59,400
Total cash cost per ounce - $767 $627
by-product
SUMMARIZED FINANCIAL RESULTS (Cont.)
(in millions of United States dollars, except per
share and per ounce amounts)
Three Months Ended
June 30
2011 2010
Production Data (Cont.):
Peñasquito : Tonnes of ore mined 8,973,800 -
Tonnes of waste removed 30,490,200 -
Tonnes of ore milled 7,360,600 -
Average head grade (grams 0.35 -
per tonne) - gold
Average head grade (grams 27.11 -
per tonne) - silver
Average head grade (%) - 0.38 -
lead
Average head grade (%) - 0.64 -
zinc
Gold ounces produced 58,400 -
Silver ounces produced 4,602,300 -
Lead (thousands of 38,500 -
pounds) produced
Zinc (thousands of 66,500 -
pounds) produced
Total cash cost per ounce ($801) -
- by-product
Total cash cost per ounce $851 -
- co-product
Los Filos mine : Tonnes of ore mined 6,492,300 6,729,600
Tonnes of waste removed 7,893,100 8,979,200
Tonnes of ore processed 6,619,700 6,783,800
Average grade processed 0.71 0.71
(grams per tonne)
Gold ounces produced 83,500 82,600
Total cash cost per ounce $438 $446
- by-product
El Sauzal mine : Tonnes of ore mined 550,500 618,400
Tonnes of waste removed 1,007,100 1,125,300
Tonnes of ore milled 517,400 510,700
Average mill head grade 1.43 2.55
(grams per tonne)
Gold ounces produced 22,400 39,300
Total cash cost per ounce $593 $299
- by-product
Marlin mine : Tonnes of ore milled 371,200 374,600
Average mill head grade 6.66 5.94
(grams per tonne) - gold
Average mill head grade 170 136
(grams per tonne) -
silver
Gold ounces produced 78,900 71,500
Silver ounces produced 1,896,400 1,437,700
Total cash cost per ounce ($368) $48
- by-product
Total cash cost per ounce $373 $316
- co-product
Alumbrera mine :( (1)) Tonnes of ore mined 2,000,400 2,938,400
Tonnes of waste removed 4,805,800 5,340,100
Tonned of ore milled 3,682,000 3,547,600
Average mill head grade 0.47 0.43
(grams per tonne) - gold
Average mill head grade 0.45% 0.44%
(%) - copper
Gold ounces produced 38,000 34,400
Copper (thousands of 28,000 28,000
pounds) produced
Total cash cost per ounce ($821) $102
- by-product
Total cash cost per ounce $738 $634
- co-product
(1) Goldcorp's interest - 37.5%
SUMMARIZED FINANCIAL RESULTS (Cont.)
(in millions of United States dollars, except per
share and per ounce amounts)
Three Months Ended
June 30
2011 2010
Production Data (Cont.):
Marigold mine :( (1)) Tonnes of ore mined 2,165,400 661,400
Tonnes of waste removed 6,444,400 8,608,300
Tonnes of ore processed 2,165,400 661,400
Average grade processed 0.56 0.51
(grams per tonne)
Gold ounces produced 26,600 16,900
Total cash cost per ounce $764 $686
- by-product
Wharf mine : Tonnes of ore mined 611,100 589,000
Tonnes of ore processed 729,100 716,000
Average grade processed 0.86 0.76
(grams per tonne)
Gold ounces produced 13,300 19,400
Total cash cost per ounce $655 $556
- by-product
Financial Data:
Cash provided by operating activities of continuing $330 $383
operations
Net earnings from continuing operations $489 $524
attributable to shareholders of Goldcorp Inc.
Net earnings attributable to shareholders of $489 $521
Goldcorp Inc.
Net earnings per share from continuing operations - $0.61 $0.71
basic
Net earnings per share - basic $0.61 $0.71
Adjusted net earnings per share - basic $0.52 $0.27
Weighted average number of shares outstanding 800,830 734,793
(000's)
(1) Goldcorp's interest - 66.67%
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF EARNINGS
(In millions of United States dollars, except for per share amounts -
Unaudited)
Three Months Six Months
Ended June 30 Ended June 30
2011 2010 2011 2010
Revenues $ 1,323 $ 815 $ 2,539 $ 1,533
Mine operating
costs
Production (512) (347) (963) (633)
costs
Depreciation (178) (133) (342) (259)
and depletion
(690) (480) (1,305) (892)
Earnings from 633 335 1,234 641
mine operations
Exploration and (14) (14) (26) (28)
evaluation costs
Share of net (8) - (6) -
earnings and
losses of
associates
Corporate (61) (46) (119) (82)
administration
Earnings from 550 275 1,083 531
operations and
associates
Gain on - - 320 -
disposition of
securities
Gains (losses) on 72 (88) 15 (22)
derivatives, net
Gains on - 426 - 407
dispositions of
mining interests,
net
Finance costs (5) (5) (11) (13)
Other income 12 (4) 34 (16)
(expenses)
Earnings from 629 604 1,441 887
continuing
operations before
taxes
Income taxes (140) (80) (301) (131)
Net earnings from 489 524 1,140 756
continuing
operations
Net earnings - (5) - 10
(loss) from
discontinued
operations
Net earnings $ 489 $ 519 $ 1,140 $ 766
Net earnings from
continuing
operations
attributable to:
Shareholders of $ 489 $ 524 $ 1,140 $ 756
Goldcorp Inc.
Non-controlling - - - -
interests
$ 489 $ 524 $ 1,140 756
Net earnings
(loss)
attributable to:
Shareholders of $ 489 $ 521 $ 1,140 768
Goldcorp Inc.
Non-controlling - (2) - (2)
interests
$ 489 $ 519 $ 1,140 $ 766
Net earnings per
share from
continuing
operations
Basic $ 0.61 $ 0.71 $ 1.43 $ 1.03
Diluted 0.52 0.71 1.35 1.03
Net earnings per
share
Basic $ 0.61 $ 0.71 $ 1.43 $ 1.04
Diluted 0.52 0.70 1.35 1.04
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of United States dollars - Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
2011 2010 2011 2010
Operating
Activities
Net earnings $ 489 $ 524 $ 1,140 $ 756
from
continuing
operations
Adjustments
for:
Reclamation (6) (4) (10) (10)
expenditures
Gain on - - (320) -
disposition of
securities
Gains on - (426) - (407)
dispositions
of mining
interests, net
Items not
affecting cash
Depreciation 178 133 342 259
and
depletion
Share of net 8 - 6 -
earnings and
losses of
associates
Share-based 31 17 53 27
compensation
expense
Realized and (76) 92 (27) 24
unrealized
losses
(gains) on
derivatives,
net
Accretion of 4 3 7 7
reclamation
and closure
cost
obligations
Deferred 90 31 (10) (96)
income tax
expense
(recovery)
Other (1) 20 (1) 28
Change in (387) (7) (264) 77
working
capital
Net cash 330 383 916 665
provided by
operating
activities of
continuing
operations
Net cash - 2 - 21
provided by
operating
activities of
discontinued
operations
Investing
Activities
Acquisitions, - - - (797)
net of cash
acquired
Expenditures (405) (287) (751) (568)
on mining
interests
Deposits on (8) (8) (14) (25)
mining
interest
expenditures
Interest paid - (3) (9) (3)
Repayment of - 192 64 192
capital
investment in
Pueblo Viejo
Proceeds from - 220 - 267
disposition of
mining
interests, net
Income taxes - - - (149)
paid on
disposition of
Silver Wheaton
shares
Proceeds from - - 519 -
sale of
securities,
net
Purchase of (24) (4) (30) (4)
securities and
other
investments
Other (1) 8 (5) 3
Net cash (438) 118 (226) (1,084)
provided by
(used in)
investing
activities of
continuing
operations
Net cash used (88) (17) (88) (21)
in investing
activities of
discontinued
operations
Financing
Activities
Debt - 130 - 730
borrowings
Debt - (580) - (730)
repayments
Common shares 384 55 395 61
issued, net of
issue costs
Dividends paid (82) (33) (157) (66)
to
shareholders
Other - (1) - (1)
Net cash 302 (429) 238 (6)
provided by
(used in)
financing
activities of
continuing
operations
Net cash - 48 - 48
provided by
financing
activities of
discontinued
operations
Effect of (8) (1) (18) (1)
exchange rate
changes on
cash and cash
equivalents
Increase 98 104 822 (378)
(decrease) in
cash and cash
equivalents
Cash and cash 1,280 393 556 875
equivalents,
beginning of
period
Cash and cash 1,378 497 1,378 497
equivalents,
end of period
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
(In millions of United States dollars - Unaudited)
At June 30 At December At January
2011 31 1
2010 2010
Assets
Current assets
Cash and cash $ 1,378 $ 556 $ 875
equivalents
Accounts 514 444 279
receivable
Inventories 476 397 349
and
stockpiled
ore
Notes 65 64 -
receivable
Asset held - - 57
for sale
Other 156 115 95
2,589 1,576 1,655
Mining
interests
Owned by 23,662 23,499 16,731
subsidiaries
Investments 1,418 1,251 565
in associates
25,080 24,750 17,296
Goodwill 762 762 762
Investments in 271 924 388
securities
Note receivable 47 47 -
Deposits on 11 6 87
mining interest
expenditures
Other 145 122 116
Total assets $ 28,905 $ 28,187 $ 20,304
Liabilities
Current
liabilities
Accounts $ 523 $ 561 $ 392
payable and
accrued
liabilities
Income taxes 73 224 184
payable
Derivative 48 97 11
liabilities
Other 34 28 49
678 910 636
Deferred income 5,895 5,978 3,897
taxes
Long-term debt 715 695 656
Derivative 320 328 303
liabilities
Provisions 310 354 298
Income taxes 135 102 48
payable
Other 63 54 40
Total 8,116 8,421 5,878
liabilities
Equity
Shareholders'
equity
Common 16,865 16,407 13,463
shares, stock
options and
restricted
share units
Investment 42 460 137
revaluation
reserve
Retained 3,669 2,686 775
earnings
20,576 19,553 14,375
Non-controlling 213 213 51
interests
Total equity 20,789 19,766 14,426
Total $ 28,905 $ 28,187 $ 20,304
liabilities and
equity
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/July2011/27/c7722.html
CONTACT INFORMATION:
Jeff Wilhoit
Vice President, Investor Relations
(604) 696-3074
Fax: (604) 696-3001
Email: info@goldcorp.com
Website: www.goldcorp.com