Goldcorp will develop another Red Lake gold district project
Goldcorp reported a 27% increase in net profit for the first quarter, and also announced it will develop the Cochenour gold project in the Red Lake District.
Posted: Friday , 08 May 2009
RENO, NV -
Goldcorp announced Thursday that it would develop the Cochenour gold project at the Red Lake gold district in Ontario.
The project combines the existing workings of the historic Cochenour mine with the Bruce Channel gold discovery acquired by Gold Corp in the Gold Eagle transaction late last year. Goldcorp's Red Lake Mine produces approximately 600,000 ounces annually, with a total production of more than 11 million ounces to date.
"Cochenour is an important step in the optimization of long-term development plans for Goldcorp's entire Red Lake asset portfolio," the company said. "Other initiatives associated with this program include the ongoing expansion of the Red Lake mine, the assessment of possible open pit mining opportunities and the third quarter completion of the 4199 exploration drift, which will allow for a resumption of routine exploration and in-filling drilling in the high grade zone."
No mineral resource yet exists for Cochenour, but Goldcorp is sizing the project at 5 million ounces of gold and hopes to complete a pre-feasibility study and commence shaft development in 2010. The total cost for initial development this year, exclusive of the $6 million drilling budget, is estimated at $12 million.
Goldcorp President and CEO Chuck Jeannes explained that "this multi-year focus on optimizing our Red Lake assets will provide an important contribution to our growth profile over the long term."
Goldcorp also expects to invest $430 million this year in the Pueblo Viejo project, a joint venture with Barrick. The company will contribute $1.1 billion of the total initial capex of $2.7 billion for the Dominican Republic gold project. Goldcorp's share of gold production is anticipated to average 400,000 ounces annually at total cash costs of between $275 and $300 an ounce. The company's share of proven and probable gold reserves at Pueblo Viejo is nearly 9 million ounces.
Jeannes said, "We remain confident in our existing production and cash costs guidance of approximately 2.3 million ounces of gold at a total cash cost of $365 per ounce on a by-product basis and $400 per ounce on a co-product basis."
He noted that first-quarter 2009 gold production increased by 94,000 ounces compared to the same quarter a year ago "as nearly every mine met or exceeded internal forecasts."
"With approximately 90% of our first quarter revenue coming from gold sales, we were particularly pleased to see our strong gold production more than offset the impact of lower by-product metals prices," he added.
Goldcorp reported net earnings of $290.9 million or 40-cents per share for the first quarter of this year, a 27% increase over the first quarter of 2008 with net earnings of $229.5 million or 32-cents per share.
The company paid $32.9 million in dividends and reported $261 million in cash and equivalents.
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