Corporate Update January 2011
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Corporate Update January 2011

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    Corporate Update January 2011 Corporate Update January 2011 Presentation Transcript

    • Investor Presentation JANUARY 2011
    • Forward Looking Statements This presentation 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, 2009 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. All amounts are in U.S. dollars, unless otherwise stated.2
    • • Growth Leader • Low Cost Producer SUSTAINABLE • Outstanding Balance Sheet PROSPERITY • Low Political Risk • Commitment to Sustainability3
    • Focus in the Americas CANADA Argentina 5% Guatemala 15% USA Dominican Republic 2% Canada DOMINICAN 43% REPUBLIC MEXICO GUATEMALA Mexico 29% US STABLE JURISDICTIONS 6% 2011E Au Production CHILE ARGENTINA OPERATING MINES DEVELOPMENT PROJECTS4
    • Proven Strategy • Growing production • Large, long-life mines • Low-cost producer • Low country risk • Accelerating cash flow Disciplined • Disciplined acquisition and earnings Portfolio strategy Execution Management Shareholder Sustainable Return Prosperity • Exceptional balance • Responsible sheet to fund growth Stewardship internally • Human Rights • Replace/grow reserves • Safety • Active dividend policy5
    • Delivering Superior Return 1570% Goldcorp 1370% +1417% 1170% 970% Peers* 770% +670% 570% Gold Price +419% 370% Philadelphia Gold / Silver Index 170% +332% Dow Industrial -30% +10% 2001 2003 2005 2007 2009 2011 * Peers include Barrick, Newmont, Kinross and Agnico Source: Bloomberg data Jan. 1/01– Jan. 1/116
    • Track Record of Quality Growth Production Growth (Moz) Revenue Growth ($M) 2,517.2 $2,724 2,324.3 2,421.3 2,292.6 $2,420 $2,207 1,693.3 $1,649 1,136.3 $896 628.0 $191 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 $1,480 $1,270 $791 $866 $588 $764 $650 $434 $440 $397 $466 $259 1 1 $51 $53 2004 2005 2006 2007 2008 2009 Q310 YTD 2004 2005 2006 2007 2008 2009 Q310 YTD Adjusted Net Earnings ($M) Cash Flow after WC ($M)7
    • Strong Cash Margins GOLD PRICE ($ per Oz) ? $1,186 $980 $868 $703 869 $610 685 563 $409 $452 540 577 294 430 163 305 295 317 115 33 22 2004 2005 2006 2007 2008 2009 Q310 YTD By-Product Cash Costs Cash Margin8
    • Outstanding Future Growth Profile (Ounces) 4,500,000 400 4.0 Moz 4,000,000 350 3,500,000 300 3,000,000 250 2,500,000 200 2,000,000 150 1,500,000 100 1,000,000 500,000 50 - 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Cash costs: 2011-2015 est. Au actual production Au est. production9
    • A Robust Pipeline Peñasquito UG (+5 years) Scoping Red Lake OP (+5 years) Noche Buena (+5 years) Cerro Blanco (+5 years) Feasibility Camino Rojo (2014) El Morro (2015) Éléonore (2014) Construction Cerro Negro (2013) Cochenour (2014) Pueblo Viejo (2011) Peñasquito (2010) Production Los Filos (2008) Marlin (2006) Red Lake & other operating mines10
    • Growth Continues in 2011 2011 Guidance1 2010 Actual Gold production (M oz) 2.65 - 2.75 2.52 Cash costs $/oz - By-Product $280 - $320 ~ $285 - Co-Product $475 - $500 <$450 Capital expenditures $1.8B TBA Exploration expenditures $170M TBA Corporate administration $125M TBA Depreciation /oz $280 TBA 1 2011 price assumptions: Au=$1250/oz, Ag=$20/oz, Cu=$3.25/lb, Zn=$0.90/lb, Pb=$0.90/lb, CAD=1.03 and MXN=12.50, Oil=$85/bbl11
    • Silver Production: Hidden Value 50 47 45 40 40 40 35 33 30 Mozs 25 20 15 10 5 2011 2012 2011 2012 0 Goldcorp Fresnillo Market Cap* $32.6B $16.9B Source: RBC Analyst Estimates, Goldcorp Internal Estimates * As of January 18, 201112
    • Delivering Shareholder Value Cash Flow/Share Earnings/Share Au Reserves/Share Au Resources/Share (US$/share) (US$/share) (ounces/1,000 shares) (ounces/1,000 shares) +204% +196% +253% +346% 183 99 $1.61 $0.80 $0.53 $0.27 28 41 2004 2009 2004 2009 2004 2009 2004 200913
    • Cash flow Per Share Growth (10E – 12E) 67% 51% 22% 20% 12% Goldcorp Agnico Kinross Barrick Newmont * Source: Analyst industry consensus14
    • Financial Position – Excellent Liquidity Balance Sheet (US$) as at Dec. 31, 2010 Cash ~$530M Available debt facility $1.5B B Convertible senior notes $862.5M Avg. annual cash flow over next 5 years ~$2.5B1 Debt: Total capitalization <0.04:1 1 Price Assumption 2011-2015: Au - $1250/oz; Ag - $20/oz; Cu - $3.25/lb; Zn - $0.90/lb; Pb - $0.90/lb; Oil - $85/bbl15
    • Cerro Negro Advancing a World-Class Project in Argentina • Large, high-quality deposit Alumbrera Rio de Janeiro El Morro • Strong mining jurisdiction Santiago Buenos Aires • 62,000 meters drilling since last resource calculation Cerro Negro - New comprehensive resource estimate available Feb. 2011 • Updated feasibility study Q1 2011 - Significant potential to expand resources, mine life and production rates16
    • Cerro Negro: Large, Prospective Land Package (2009) No pending; Resource resource; Existing resource Pending resource; 0.6Moz M&I, high grade Au; focus high grade discoveries a focus 0.1Moz Inferred; in for 2011 San Marcos for 2010 2011 FS as open pit at end of LOM Mariana Norte Existing resource Eureka Mariana Central Vein Zone 1.4Moz M&I; 0.2Moz Inferred; open to depth and to west; focus for 2011 Bajo Negro Silica Cap Requires drilling – initial Cerro Negro Existing resource: discovery 0.5Moz M&I, 0.2Moz Inferred; open to depth and to NW Total land package: 215 sq. kilometers17
    • Cerro Negro: Eureka - Current Resource Drilling now focused at bonanza elevations Trace of veins on surface NW SE 2011 Eureka Vein Extension Drilling 1.5 kilometers18
    • Cerro Negro: Marianas and San Marcos Veins Significant new high grade discoveries to enhance updated resource Limited surface expression of veins NW S 2011 E Expansion Drilling Mariana 2011 Norte Expansion San Drilling Marcos 2011 2011 Expansion Expansion Mariana Drilling Drilling Central 1 kilometer19
    • Cerro Negro: Mariana Central Vein Excellent continuity of very high grade over 400 meters Surface NW SE Fault Offsetting Deposit g/t Au X m Open 200 meters20
    • Peñasquito Hitting its Stride in 2011 • High pressure grinding roll circuit USA to bring 130,000 tpd capacity by end El Sauzal Chihuahua of Q1’11 Peñasquito CANADA Red Peñasquito Lake MEXICO Mazatlan • 2011 Au production forecast of Zacatecas Mexico City USA 350,000 ozs at negative cash costs Los Filos • Significant cash flow generator in 2011 and beyond • Average annual production1: - 500koz Au; 28Moz Ag; 204KT Zn; 90.7Kt Pb • 22-year mine life21
    • Peñasquito Advancing Satellite Projects Camino Rojo USA • 5 drill rigs in 2011 Peñasquito CANADA • Significant resource growth potential • Large land package – 3,389 sq. km Noche Buena • Drill program completed Aug. 2010 • Environmental baseline work & metallurgical study complete • Infill program to commence in Q2’1122
    • Red Lake New Opportunities at World’s Richest Gold Mine • Robust, low cost gold production Musselwhite • 2011 gold production forecast of Red Lake Éléonore Cochenour 665,000 ozs CANADA Porcupine USA • 2011 exploration budget $36M Toronto - High Grade Zone continues at depth - Hanging wall exploration success • Utilizing excess milling capacity • District optimization plans advancing: Cochenour, open pit23
    • Red Lake: Composite Longitudinal View NE Cochenour Willans RLGM McKenzie Mine Mine Campbell Marcus Rahill Complex Bonanza 1300 LEVEL Wilmar West HG Young East CB WGZ CB Bx 2600 LEVEL Craibe zone Fletcher 3200 LEVEL GAP Cochenour VENT RAISE Main Zone Bruce- Channel ORE PASS Cochenour UMZ Campbell Bruce-Channel deep Cochenour Footwall 5400 LEVEL Fin Zone 0 200 400 600 Meters (approximate)24
    • Red Lake: Extending the HGZ Red Lake 2010 Exploration Complex Connection Drift 4499 Exploration Drive • Extending Reserves from 49 Level to 52 Level Campbell Complex • Significant Results from the Connection Drift 1 between 45-47 Levels 47 L • 2011 Continue exploration drifting to drill HGZ at depth Drift location 49 L end of 2010 2 Select 2010 Uncut Results Drift 4 2010 location 3 From To Approx. true 5 Drill Hole Area Au (g/t) end of 2011 6 (m) (m) width (m) 1 D44068 HGZ 46 Level 105.92 149.96 34.72 136.25 7 8 52 L 2 D44021 HGZ 50 Level 337.72 346.86 8.60 55.78 3 D43091 HGZ 50 Level 344.73 348.51 3.47 257.28 2011 4 D44031 HGZ 50 Level 347.47 348.69 1.10 3706.90 5 D43088 HGZ 51 Level 349.30 352.35 2.65 71.66 54 L 6 D44032 HGZ 51 Level 349.39 351.43 1.80 1826.33 7 D44058 HGZ 51 Level 355.03 356.13 0.98 3591.98 2012 No Significant Values 8 D43089A HGZ 51 Level 355.91 356.25 0.34 2406.8925
    • Cochenour Key Growth Drivers in Red Lake District • Initial operation sized for 5 million ounces of gold Musselwhite Red Lake Éléonore • Initial resource pending CANADA Cochenour Porcupine USA • $90M investment in 2011 - Shaft rehabilitation -18’ diameter - 5 km high speed tram (50% complete by year-end 2011) - Testing large unexplored ground • First production late 201426
    • Pueblo Viejo Newest Growth Driver • 9.5 million ounces of reserves1 USA • Life of mine +25 years DOMINICAN MEXICO REPUBLIC Pueblo Viejo • $290 million capital budget for 2011 • First gold targeted Q4 2011 • Annual output 415,000 to 450,000 ounces per year1 in first five years 1 Goldcorp interest 40%27
    • El Morro A World Class Project in Mining Friendly Chile • 4.7 million ounces of gold reserves1 Alumbrera Rio de Janeiro El Morro • 4.0 billion pounds of copper Santiago Buenos Aires reserves1 Cerro Negro • Large, underexplored land position • Leverage Goldcorp’s large mine development expertise • Updating 2008 feasibility study and advancing permitting 1 Goldcorp interest 70%28
    • Éléonore Pure Gold in a Safe Jurisdiction • Currently sinking exploration shaft Musselwhite Red Lake Éléonore • Resources: M&I of 3M ounces Au, CANADA Cochenour Porcupine USA Inferred of +6M ounces Au • Previous feasibility study: - 330,000 ounces Au production1 - Cash costs < $400/oz - +6 year mine life commencing in 2015 • Pre-feasibility study update Q1 1 Initial yearly average production target29
    • Targeting 7th Consecutive Year of Reserve Growth GOLD PROVEN & PROBABLE RESERVES (000’s oz) ? 48,800 46,300 43,400 39,700 2006 2007 2008 2009 2010 2011 Exploration Budget - $170M30
    • Ten Straight Years of Increasing Gold Prices 1600 1400 Flat mine supply 1200 Why 1000 Growing physical demand - Central bank buying Gold? 800 600 Growing physical demand 400 200 - Inflation hedge - Global debt crises 0 2001 2003 2005 - Currency protection 2007 2009 201131
    • Goldcorp vs Gold Goldcorp Physical Gold Leverage in operating costs  x Holding costs x  Organic growth  x Pays dividend  x32
    • Key 2011 Milestones Complete ramp up to 130,000 tpd at Peñasquito Advance Cochenour high speed tram to 50% completion Advance Éléonore exploration shaft Delivering Drive Porcupine winze at Hoyle Pond Growth Commence Musselwhite shaft pre-collar Commence construction of El Morro Commence construction of Cerro Negro Advance early-stage development pipeline33
    • • Growth Leader SUPERIOR • Low Cost Producer INVESTMENT • Outstanding Balance Sheet • Low Political Risk PROPOSITION • Commitment to Sustainability34
    • Appendix A: Increasing GEO Production (Ounces) 6,000,000 5.6 Moz 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GEO actual production GEO est. production35
    • Appendix B - 2011 Sensitivities Change CFPS By Product Cash FCF Base Price ($/share) ($mm) Increments Costs ($/oz) Gold Price ($/oz) $1250 $100 $0.25 $196M Silver Price ($/oz) $20.00 $1.00 $0.02 $10 $18M Copper Price ($/lb) $3.25 $0.50 $0.02 $12 $17M Zinc Price ($/lb) $0.90 $0.10 $0.03 $14 $26B Lead Price ($/lb) $0.90 $0.10 $0.02 $7 $13M Canadian Dollars 1.03 10% $0.04 $20 $100M Mexican Peso 12.50 10% $0.02 $11 $24M Oil Price ($/barrel) $85.00 10% $0.01 $2 $8M36
    • Appendix C – Operating Costs Breakdown Consolidated 7% 5% 4% 24% 2% 15% 17% 10% 9% 7% Canada/US Mexico CA/SA 5% 4% 6% 13% 3% 5% 15% 15% 1% 7% 10% 4% 38% 3% 8% 4% 19% 2% 8% 8% 17% 7% 20% 10% 11% 4% 20% 10% 10% 13% Labour Contractors Fuel Costs Power Maintenance Parts Consumables Tires Explosives Site Costs Others37
    • Endnotes 1. Total cash costs are defined as cost of sales divided by ounces of gold and silver sold or pounds of copper sold. The calculation of total cash costs per ounce of gold is net of by-product sales revenue (by product copper revenue for Alumbrera; by-product silver revenue for Marlin at market silver prices; and by-product silver revenue for Luismin of $3.95 per silver ounce sold to Silver Wheaton). Goldcorp has included a non-GAAP performance measure, total cash costs per gold ounce, throughout this presentation. Goldcorp 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. Goldcorp follows the recommendations of the Gold Institute standard. Goldcorp believes that, in addition to conventional measures, prepared in accordance with GAAP, certain investors use this information to evaluate Goldcorp’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. 2. All Mineral Reserves and Mineral Resources have been calculated as at December 31, 2009 in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101, or the AusIMM JORC equivalent. Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. “Inferred Mineral Resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Goldcorp’s Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable. Calculations have been prepared by employees of Goldcorp, its joint venture partners or its joint venture operating companies, as applicable, under the supervision of Maryse Belanger, Director Technical Services. Reserve calculations incorporate current and/or expected mine plans and cost levels at each property. Varying cut-off grades have been used depending on the mine and type of ore contained in the reserves. Goldcorp’s normal data verification procedures have been employed in connection with the calculations. For a breakdown of Reserves and Resources by category and for a more detailed description of the key assumptions, parameters and methods used in calculating Goldcorp’s Reserves and Resources, see Goldcorp’s Annual information Form/ Form 40-F on file with Canadian provincial securities regulatory authorities and the U.S. Securities and Exchange Commission. 3. Goldcorp’s exploration programs are designed and conducted under the supervision of Charlie Ronkos, Vice President, Exploration of Goldcorp. For information on geology, exploration activities generally, and drilling and analysis procedures on Goldcorp’s material properties, see Goldcorp’s Annual Information Form/Form 40-F on file with Canadian provincial securities regulatory authorities and the U.S. Securities and Exchange Commission.38