Goldcorps Operations Suggest Substantial Growth in 2014

Source: Thinkstock

Source: Thinkstock

Goldcorp (NYSE:GG) is one of the world’s fastest growing senior gold producers. I am of the opinion that gold and silver equities are a good buy right now, particularly for the long-term, as I see gold prices climbing higher due to inflationary pressures rising. Those holding gold, silver, and stocks in the sector as insurance against inflation will be rewarded in time. I recently covered the financial aspects of Goldcorp, detailing its low cost production and raised output. The purpose of the present article is to provide an operational update on the company during the most recent quarter and expectations moving forward at the company’s Central American, Canadian, Mexican, and South American projects.

The first property to update you on is in Central America at the Pueblo Viejo mine. At Pueblo Viejo, first quarter gold production totaled 106,200 ounces at an all-in sustaining cost of $628 per ounce. Production increased 66 percent from the same prior year period as a result of major modifications to the autoclave facility in the second half of 2013, as the mine worked to achieve design capacity and all four autoclaves came online. Ramp-up is expected to continue during the first half of 2014 to full capacity following completion of the modifications to the lime circuit. Gold production for 2014 is expected to be between 405,000 and 420,000 ounces. This mine has promising reserves for the company moving forward.

The second and third properties are located in Canada at Red Lake and Porcupine mine sites in Ontario. At Red Lake in Ontario, gold production for the first quarter was 95,000 ounces at an all-in sustaining cost of $954 per ounce. Gold production was affected by planned lower heading availability due to scheduled de-stress activities which are expected to be completed in the third quarter of 2014. Exploration drilling targeting the upper portion of High Grade Zone Main structure returned high grades over substantial widths. Drilling continues to extend the zone to higher elevations. At Porcupine in Ontario, gold production in the first quarter totaled 66,500 ounces at an all-in sustaining cost of $945 per ounce. The Hoyle Deep Project continued to sink the #2 Winze shaft to access both the deep extensions of the current and newly discovered zones and to enhance operational efficiencies throughout the Hoyle Pond mine. At the Hollinger project, overburden stripping commenced during the first quarter of 2014. Once these mines ramp up, production could double from current levels.

At the Cochenour project in the Red Lake district, the haulage drift connecting the Bruce Channel deposit to the Red Lake complex advanced to 90 percent completion. During the first quarter of 2014, the Cochenour shaft reached its final bottom depth of 1,116 meters. A ramp of 1,175 meters is being developed to continue the decline down to the 4,000 foot level. The Cochenour-Red Lake integration team is focused on geotechnical assessments, backfill and material handling studies as well as infrastructure rationalization and placement. Exploration continues with four drills on site, completing 9,337 meters in the first quarter 2014 to further define the ore deposit. Preliminary results have been consistent with the company’s expectations.

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