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WIKI ANALYSIS
Goldcorp Inc. (TSX:G NYSE:GG) is one of the world's largest, most cost effective (twice as much net income as Kinross Gold in the first three quarters of 2010 despite similar revenue) and most active (has had a major interest in a number of other major companies including Silver Wheaton, Glamis Gold, Placer Dome, Escobal the half a billion dollar Guatemala silver deposit, acquired $240 million worth (8 percent) of Thompson Creek Metals by selling it 52% of Terrane Metals, 40% of Tahoe Resources, 11% of Northgate Minerals (NXG)). It has a direct interest in 17 major gold and silver projects throughout the America's (December 2010, 9 in the USA and Canada, 8 in the rest of America). In addition it has recently acquired 100% (deal completed December 30, 2010) of the 2.1 million ounce Cerro Del Negro deposit in Argentina (through the $3.6 billion takeover of Andean Resources).[1][2]; It paid a 56% premium for Andean based on Andean's average stock price in the previous 20 days.[3] It is engaged in gold mining production and related activities which include exploration, extraction, processing, and reclamation. In 2010 George Soros became a shareholder of the company.[4]
Goldcorp also has one of the most extensive relationships of any gold mining company with other companies. It remains 100% unhedged (highly exposed to gold prices for most of its history) which means it doesn't need to spend billions of dollars to get out of bad hedge positions (in late 2009 the elimination of hedge commitments cost Barrick Gold $3 billion.[5][6] Goldcorp also owns 13% of Osisko Mining whose key asset is the 10 million ounce (2P reserve) Malartic deposit in Quebec; it also helped to establish another up and coming company New Gold by lending it the $463 million it needed to purchase the El Morrow gold and copper project in Chile from Xstrata.[5] Its 100% owned Penasquito mine in Mexico (hasn't started producing yet) has 1 billion ounces of silver in reserves.
Gold production in the first nine months of 2010 amounted to 1.8305 million ounces (2.441 million annualized) a slight increase year on year. 52% of the increase came from Red Lake despite the fact that gold reserves there are dwindling (less than 5 years left at 2010 production rates).
In February of 2011 Goldcorp revised its reserve estimates, 2P reserves grew 23% from the last stated period (January 2010) to 60.06 million ounces for gold, 1.3 billion ounces for silver, 5.406 billion pounds for copper, 7.275 billion pounds for lead and 17.575 billion pounds for zinc.[7][8]
Business overview, gold production by country
production at operating mines (or close to it)
With a couple very large projects expected to come on tap within the next year or two (Osisko's Malartic, 40% owned Pueblo Viejo (23.7 million proved and probable ounces), 100% owned Peñasquito (one of Mexico's biggest, 2P reserves 17.8 million ounces of gold, over 1 billion ounces of silver, 7 billion pounds of lead, 15.93 billion pounds of zinc) among many other big and small deposits, annual production is expected to increase significantly (Goldcorp expects it to be at least 50%). Penasquito began commercial production in September 2010, Silver Wheaton has purchased some of the silver that will be produced there.
The period of 2006/2007 was one of the most significant in company history in terms of production growth. Gold production increased 35.4% over that period going from 1.693 million to 2.2926 million ounces (although by product total cash costs per ounce increased 382% from 39 to $188, net earnings barely changed though).
| 1000 oz | 2008 | 2009 | 9M10 | 1000 oz | 2008 | 2009 | 9M10 |
|---|---|---|---|---|---|---|---|
| Red Lake | 629.2 | 622.7 | Porcupine | 291 | 318.3 | ||
| El Sauzal | 274.2 | 203.8 | Alumbrera(au) | 189.2 | 158.2 | ||
| Musselwhite | 210.5 | 232.6 | Marlin(au) | 241.4 | 274.9 | ||
| Wharf | 60.7 | 67.7 | Marigold | 96.2 | 97.9 | ||
| Marlin(ag) | 3,287.5 | 4,156.5 | Los Filos | 213.6 | 239.3 | ||
| Penasquito gold | na | na | 500 '11fyEst | Pueblo Viejo gold,40% | na | na | 1,000 '12fyEst |
| Penasquito silver | na | na | 28,000 '11fyEst |
Projects and their reserves
| au,ag mil oz cu bil lbs 2010 | El Morrow | Camino Rojo | Éléonore[9] | Pueblo Viejo | San Dimas Primero[10] | Noche Buena | Cerro Blanco | Escobal[11] Tahoe Res | Cochenour nr RedLake[9] |
| 2P gold feb'11(jan'10) | 5.7 | 3.44(ind) | 3.2 | 9.46 | 0.86 | 0.96ind(0.53) | 2.07 (1.3) | 1.27(ind) | na |
| 2P copper | 4.282 bil | na | na | 58.92(2P) | no | na | na | na | na |
| 2P/meas/ind silver | na | 60.7 | 60.7(ind) | 55.14(2P) | yes | 32.44 (ind) | 5.8(ind) | 187.5 resource | na |
| total gold (ind+inf+2P) resource[7][11]feb'11('10) | 8.78(inf) | 3.99(3.9) | 7.68(9.5) | 13.46 | na | 1.2(0.77) | 1.94(2) | na(0.22) | 2.7(5) |
| % interest | 70% | 100% | 100% | 40% | 36% | 100% | 100% | 40% | 100% |
sources include Goldcorp 1st and 3rd 2010 quarterly reports and results (they are different), 2009 end of year factsheet, goldcorp website operations, 24hr gold and Goldcorp's 2009 end of year reserves and resources estimates
In February 2011 goldcorp added 6.9 million ounces of gold to its reserves from existing resources (previously measured and indicated/inferred) and another 6.9 million came from acquisitions the largest of which was Andean Resources which controls 100% of the the Cerro del Negro mine in Argentina (2P 2.07mil with another 2.66mil measured and indicated and 720,000 inferred).
Camino Rojo has 695 million pounds of measured and indicated lead resources, the only other Goldcorp property with lead is Penasquito Mill which has 7.275 billion pounds of 2P reserves (1.886 billion pounds indicated).[7]
Interest in San Dimas is through its 11% stake in Northgate Minerals Corp. Goldcorp also owns 40% of Tahoe Resources, another Canadian silver and gold mining company.
Gold reserves, total cash costs & silver production
| mil oz au,ag lbs cu | 2P gold (2011est) | 2P gold (2010est) | 2P copper ('10) | 2P silver ('10/'11) | total resource gold 2011(2010) | % interest[12] | Total cash costs by-product | 2007 | 2008 | 9M09 | 9M10 |
| Red Lake | 4.12 | 3.42 | na | na | 5.48 | 100% | 260 | 302 | 255 | 268 | |
| Porcupine | 3.29 | 2.79 | na | na | 7.86 | 100% | 489 | 588 | 406 | 526 | |
| Musselwhite | 2.12 | 2.11 | na | na | 2.38 | 100% | 491 | 611 | 737 | 632 | |
| Penasquito(1Q'10)[9] n.incl zinc,lead | 18.57 | 17.8 | na | 1.1 bil | 23.5 | 100% | na | na | na | (577) | |
| Los Filos | 5.47 | 5.67 | na | na | 7.07 | 100% | na | 407 | 455 | 438 | |
| El Sauzal | 0.27 | 0.33 | na | na | 0.47 | 100% | 120 | 149 | 258 | 220 | |
| Marlin | 1.53 | 2.07 | yes | na | 2.14 | 100% | 144 | 191 | 52 | 185 | |
| Alumbrera | 1.33 | 1.53 | yes | na | na | 37.5% | (684) | (449) | (896) | (823) | |
| Marigold | 1.55 | 1.61 | na | na | 2.5 | 66.67% | 575 | 608 | 817 | 542 | |
| Wharf | 0.60 | 0.19 | na | na | 0.48 | 100% | 369 | 481 | 679 | 665 | |
| Cerro Negro | 2.07 | na | na | 20.5 | 5.45 | 100% | |||||
| El Morrow | 5.72 | na | 4.282b | na | 8.78 | 70% | |||||
| Pueblo Viejo | 9.46 | na | 213m | 58.92 | 13.46 | 40% | |||||
| Eleonore | 3.03 | na | na | na | 7.68 | 100% | |||||
| Total | 60.06[8][7] | 48.75[10] | 5.406 bil[7] | 1,300[10] | 106.19(2011)[7] 91.06(2010)[10] | na | 305 | 295 | 260 |
Goldcorp experienced significant growth in the first decade of the 21st century, its total resource of gold increased from about 5 million in 2001 to over 80 million in 2009.[13] On February 24, 2010 Goldcorp sold its 21.2% interest in El Limon (it lost $18.7 million there).
The company produced 11.8499 million ounces of silver in 2009 a 23.1% increase over 2008 production. Though still its largest source of silver, San Dimas production fell 0.4% to 5.0934 million ounces (43% of the company total) from 5.1135 million ounces in 2008 (53.1% of the company total). Silver production increased the most at Penasquito (exactly twice as much up to 2.6 million ounces, 21.94% of the total) while Marlin also increased to 4.1455 million (29.38% year on year increase).[10]
Business and Financials
Significant changes in net income happened in 2007/2008 (220.7% increase over that year to about $1.5 billion) and 2009/2010 (for the first three quarters of 2010 (January to September) net income was 1238.4 million (618.3% more than the corresponding period in 2009).[14]
References
- ↑ Goldcorp says gets requisite shareholder majority for Andean buy (2010-12-03).
- ↑ Eldorado, Goldcorp vie for Andean Resources (2010-09-03).
- ↑ Northgate Takeover
- ↑ Paulson Top Pick AngloGold Delayed in Colombia as Billionaire Boosts Stake (2011-05-25).
- ↑ 5.0 5.1 Goldcorp's big shoes (2010-06-24).
- ↑ Barrick in huge primary common-equity offering (2009-09-08).
- ↑ 7.0 7.1 7.2 7.3 7.4 7.5 Goldcorp Inc. Reserves & Resources. Retrieved on 2011-02-16.
- ↑ 8.0 8.1 Goldcorp announces gold reserves increase 23 pct (2011-02-10).
- ↑ 9.0 9.1 9.2 Goldcorp 2010 First Quarter Report (2010-11-19).
- ↑ 10.0 10.1 10.2 10.3 10.4 Goldcorp Factsheet 2009 end of year data (2010).
- ↑ 11.0 11.1 Goldcorp Reserves & Resources (2009-12-31).
- ↑ Goldcorp 2010 Third Quarter Report (2010-10-27).
- ↑ Total reserves and resources exceed 5 million ounces. (2001-01-26).
- ↑ Goldcorp 2010 Third Quarter Results December 2010
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