Toronto Stock
Exchange: G
New York Stock Exchange: GG
Goldcorp Cash Flow
Increases 35% In The Third Quarter;
Strong Production Increase Of 11% And Cash Cost Performance Lead To
Increased 2009 Guidance
VANCOUVER, British
Columbia � Goldcorp Inc. (TSX: G, NYSE: GG) today reported gold production of 621,100
ounces for the third quarter at a total cash cost of $295 per ounce. Adjusted
net earnings1 in the third quarter were $140.6 million, or $0.19 per
share, while reported net earnings totalled $114.2 million.
Third Quarter Highlights
- Gold production increased by 11% over the
2008 third quarter, to 621,100 ounces.
- Total cash costs2 for the
quarter were $295 per ounce on a by-product basis, and $297 per ounce year
to date.
- Total cash costs2 on a
co-product basis were $384 per ounce compared to $380 per ounce year to
date.
- Operating cash flows before changes in
working capital3 totaled $321.1 million or $0.44
per share, a 35% increase over the third quarter of 2008.
- Dividends paid amounted to $32.9 million.
- Pe�asquito concentrate production ramp-up
on schedule; concentrate shipments commence.
- Full-year gold production guidance revised
upward; cash cost guidance also improves.
�Consistent with our 2009
theme of execution throughout our operations, Goldcorp�s gold production and
cash costs were again very strong in the third quarter,� said Chuck Jeannes,
Goldcorp President and Chief Executive Officer. �Red Lake experienced an
outstanding quarter, driven by excellent results in the High Grade zone and
continued productivity enhancements. Also in Ontario, Porcupine�s
quarterly gold production was its best in almost three years. Marlin
in Guatemala and Los Filos in Mexico were also important contributors to our
quarterly results, with the Los Filos open pit operation achieving record
quarterly gold production. We saw continued success among our next
generation of growth drivers as well. At Pe�asquito, I am pleased to
report that shipments of both lead and zinc concentrates began this week. Achieving
this important milestone supports our continued confidence in the outlook for
this world-class operation. Also advancing impressively is
the Cochenour project in the Red Lake camp. Development will begin to
accelerate, as a plan is now in place detailing the best way to access the
deposit. Cochenour is a key component of our development plans in the
prolific Red Lake district, and upon completion it will be an important
contributor to our growth profile at Red Lake for many years to come.�
�Our strong
performance through the first nine months of the year has led us to
revise our production guidance, to approximately 2.4 million gold ounces at a
total cash cost of approximately $300 per ounce on a by-product basis and less
than $400 per ounce on a co-product basis. Gold prices have exhibited continued
strength and sustainability above $1,000 per ounce, and with our production and
cash costs trending positively, the stage is set for continued strength in cash
flow and profitability through the end of the year and beyond.�
Financial Review
Gold sales in the third
quarter compared to the third quarter of 2008, increased to 621,100 ounces at a
total cash cost of $295 per ounce on a by-product basis, and $384 per ounce on
a co-product basis. On both a by-product and co-product basis, Goldcorp
remains the lowest cost, highest margin senior gold producer in the
industry.
Adjusted net earnings1
totaled $140.6 million, or $0.19 per share, compared to $64.7 million or $0.09
per share, in the third quarter of 2008. Adjusted net earnings primarily
exclude the effect of a non-cash foreign exchange loss on revaluation of future
income tax liabilities, but include the impact of non-cash stock option expenses,
which amounted to approximately $0.02 per share for the
quarter. Operating cash flow before non-cash working capital adjustments3
increased 35% to $321.1 million compared to $237.3 million in last year�s third
quarter. Reported net earnings in the quarter were $114.2 million compared to
net earnings of $297.2 million in the third quarter of 2008.
For the nine months ended
September 30, 2009, revenues increased 7% to $1.9 billion, a result of
increased realized gold prices and increased gold sales volumes. On a
by-product basis, total cash costs were $297 per ounce compared to a total cash
cost of $298 per ounce in 2008. Total cash costs on a co-product basis were
$380 per ounce year to date versus $409 per ounce in the 2008 period.
For the first nine months
of the year, adjusted net earnings1 totaled $405.5 million, or $0.55
per share, compared to $312.6 million, or $0.44 per share, in 2008. Adjusted
net earnings primarily exclude the effect of a non-cash foreign exchange loss
on revaluation of future income tax liabilities and transaction costs for
issuance of convertible debt. Adjusted net earnings for 2008 primarily
exclude the effect of a non-cash foreign exchange gain on revaluation of future
income tax liabilities, the first quarter gain on the sale of the Silver
Wheaton shares, and an unrealized loss on securities. Net earnings in the
nine months ended September 30, 2009 were $173.5 million or $0.24 per share,
compared to net earnings of $517.5 million, or $0.73 per share, in 2008. Cash
flow from operations before working capital changes3 increased 24%
to $872.6 million, or $1.19 per share, from
$702.7 million, or $0.99 per share, in the nine months ended September 30,
2008.
Operations Review
Goldcorp�s cornerstone
asset delivered a strong performance in the third quarter. Gold
production at Red Lake totalled 178,800 ounces at a total cash cost of $255 per
ounce compared to gold production of 160,100 ounces at a total cash cost of
$297 in the third quarter of 2008. Exploration drilling from the 4199 drift is
advancing well with three drills off the platform: two drilling the High Grade
zone and one drilling targets in the high-potential Party Wall area.
Also in the Red Lake
district, dewatering of the Cochenour shaft continued in the third quarter with
completion expected during the first quarter of 2010. The Company has
completed a study to determine the best way to access and develop the Cochenour
ore body. The study indicates that the best method of developing the
Cochenour/Bruce Channel deposit is to enlarge and upgrade the existing
Cochenour shaft and construct a 5 kilometer high speed tram on the 5400 Level
connecting to the Red Lake mine. This will enable the Bruce Channel
deposit ore to be hauled directly to the Red Lake mine and processed at the
existing mill facility. Preparatory work for the haulage drift project
has commenced.
A 31%
increase in gold production at Porcupine in Ontario over the 2008 third quarter
highlights the strong pattern of sequential improvement over the last
year. Gold production at Porcupine totalled 90,600 ounces�its best
performance in almost three years�while cash costs fell to $406 per
ounce. Grade continued to improve through mining in higher grade stopes
and through the development of the new higher grade VAZ zone.
At Los Filos, gold
production was 60,200 ounces, driven by its best performance yet in the open
pit operations. El Sauzal�s production of 45,500 ounces was in line with
the forecast production decrease consistent with its declining mine life.
At San Dimas, higher grades in the Roberta, Robertita and Marina veins drove a
strong improvement in production versus the prior year third quarter. Gold
production was 27,500 ounces in the third quarter at a total cash cost of $313
per ounce. At the Marlin mine in Guatemala, quarterly gold and silver
production increased both from the second quarter of 2009 and the year-ago
quarter, with production of 68,800 ounces of gold and 1,083,200 ounces of
silver. These production increases were largely attributable to process
enhancements leading to both gold and silver recovery improvements.
Project Update
Positive exploration
drilling continued at �l�onore in Quebec. Strong assay results in the
deep mineralized zone to the north continued to support ongoing work on an
internal prefeasibility study planned for the end of 2009. The study is
evaluating the best options for accessing the deep high grade in the north
while simultaneously ramping up gold production from the Roberto Zone. Environmental
and social impact assessment work is continuing.
In the Dominican Republic,
development of the Pueblo Viejo project continued to track on budget and on
schedule for initial gold production in the fourth quarter of 2011. Construction
of the autoclave and related structures is now well advanced, and the mills
have now arrived in the Dominican Republic. Goldcorp�s 40% share of gold
production in the first five full years of the mine�s life is expected to
average approximately 400,000 ounces at total cash costs of between $275 and
$300 per ounce. Goldcorp�s share of proven and probable gold reserves at
Pueblo Viejo amounts to nearly 9 million ounces.
Pe�asquito Update
Since achieving mechanical
completion during the third quarter, full commissioning of the first sulphide
process line (Line 1) has steadily advanced at Pe�asquito. On November 2nd,
the Company began dispatching the first lead and zinc concentrates from the
mine site. The initial lead concentrate shipments are being sold to
Industrias Pe�oles� Met-Mex subsidiary in Torreon, Mexico, while initial zinc
concentrates are being trucked to the port of Manzanillo in preparation for
shipment to Korea Zinc Co. Ltd. Preliminary metals grades,
recoveries and concentrate quality have met or exceeded expectations.
Construction of the second
sulphide process line (Line 2) is well underway and progressing toward planned
start-up in the third quarter of 2010. Completion of construction of the
high pressure grinding rolls circuit is expected in the fourth quarter of 2010,
allowing for a ramp-up to the mill�s full 130,000 tonnes per day capacity in
early 2011. For the latest photographs from the site, please visit www.goldcorp.com and click on Operations/Pe�asquito.
Mining activities continue
to provide sulphide ore for the start-up of the Line 1 plant with rates in
excess of 500,000 tonnes per day. Initial pre-stripping has uncovered
more sulphide ore than was modeled, and the resulting ore stockpile has added a
significant degree of ore feed flexibility. At September 30, 2009, 6.2 million
tonnes of ore were stockpiled and an additional 2 million tonnes were exposed
in the pit and available for mining.
�The rate of progress we
continue to make at Pe�asquito remains consistent with our ramp-up schedule,�
added Jeannes. �The team there continues to exceed our expectations as
the transition from project to world-class mine remains well on track. This
ongoing success supports our expectation that Pe�asquito will contribute to our
five-year 50% growth profile just as we anticipated. Upon completion of
the updated Pe�asquito mine plan, the data will be integrated into our 2010
corporate budget and specific full-year expectations disclosed in January
2010.�
Corporate Social
Responsibility Update
During the third quarter,
Marlin mine in Guatemala became Goldcorp�s third gold mine to be fully
certified under the International Cyanide Management Code for the Manufacture,
Transport and Use of Cyanide in the Production of Gold. Marlin�s
achievement makes it the first mine in Central America to be so certified,
following Marigold mine as the first-ever gold mining operation to be certified
and El Sauzal as the first-ever mine in Mexico to be certified. Goldcorp
is an industry leader in its commitment to the safe handling and use of cyanide
in applicable mining operations.
2009 Outlook
In light of continued
strength in production at many of its key gold mines, the Company today revised
operating guidance for the 2009 year. Gold production guidance has been
increased from 2.3 million ounces to approximately 2.4 million ounces. Guidance
on total cash costs has also changed in light of the Company�s stronger
operating performance. Total cash costs for 2009 are now expected to be
approximately $300 per ounce of gold on a by-product basis compared to previous
guidance of $365 per ounce. On a co-product basis, total cash costs are
now expected to be less than $400 per ounce compared to previous guidance of
$400 per ounce. Price assumptions used in the calculation of these new
estimates for the fourth quarter are $15 silver, $2.75 copper, $75 per barrel
oil, and US Dollar exchange rates of $1.10 Canadian Dollars and $12.50 Mexican
pesos.
This release should be read
in conjunction with Goldcorp�s third quarter 2009 unaudited MD&A report on
the Company's website, www.goldcorp.com, in the �Investors� section under
�Financials�.
A conference call will be
held on November 5, 2009 at 10:00 a.m. (PDT) to discuss the third quarter
results. Participants may join the call by dialing toll free 888-300-0053 or
647-427-3420 for calls from outside Canada and the US. A recorded
playback of the call can be accessed after the event until December 5, 2009 by
dialing 800-642-1687 or 706-645-9291 for calls outside Canada and the US.
Passcode: 34518604. A live and archived audio webcast will also be
available at www.goldcorp.com.
Goldcorp is the lowest-cost
and fastest growing multi-million ounce gold producer with operations
throughout the Americas. Its gold production remains 100% unhedged.
(1)
Adjusted net earnings is a non-GAAP measure. 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 34 of the 2009
third quarter MD&A for a reconciliation of adjusted earnings to reported
net earnings.
(2)
The Company has included a non-GAAP performance measure, total cash cost 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, and is a non-GAAP measure. The
Company follows the recommendations of the Gold Institute 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. Refer to page 33 of the 2009 third quarter MD&A for a
reconciliation of total cash costs to reported operating expenses.
(3)
Operating cash flows before working capital changes and operating cash flows
before working capital changes per share are non-GAAP measures which the
Company believes provides a better indicator of the Company's ability to
generate cash flow from its mining operations. Cash provided by operating
activities reported in accordance with GAAP was $341.9 million and $903.7
million, respectively for the three months and nine months ended September 30,
2009.
Please click
here to view the financial statements
Please click
here to view the report
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� or �does not expect�, �is expected�, �budget�,
�scheduled�, �estimates�, �forecasts�, �intends�, �anticipates� or �does not
anticipate�, �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�. Forward-looking statements are
subject to known and unknown risks, uncertainties and other 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; risks
related to joint venture operations; actual results of current exploration
activities; actual results of current reclamation activities; conclusions of
economic evaluations; changes in project parameters as plans continue to be
refined; future prices of gold, silver, copper, lead and zinc; possible
variations in ore reserves, grade or recovery rates; failure of plant,
equipment or processes to operate as anticipated; accidents, labour disputes;
delays in obtaining governmental approvals or financing or in the completion of
development or construction activities and other risks of the mining industry,
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, 2008 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. Goldcorp does not
undertake to update any forward-looking statements that are included in this
document, except in accordance with applicable securities laws.
CONTACT INFORMATION:
Jeff Wilhoit
Vice President, Investor
Relations
(604) 696-3074
Fax: (604) 696-3001
Email: info@goldcorp.com
Website: www.goldcorp.com