Goldcorp Corporate Update Dec


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Goldcorp Corporate Update Dec

  2. 2. Forward Looking StatementsThis presentation contains “forward-looking statements”, within the meaning of the United States Private Securities LitigationReform Act of 1995 and applicable Canadian securities legislation, concerning the business, operations and financial performanceand condition of Goldcorp Inc. (“Goldcorp”). Forward-looking statements include, but are not limited to, statements with respect tothe future price of gold, silver, copper, lead and zinc, the estimation of mineral reserves and resources, the realization of mineralreserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timingof the development of new deposits, success of exploration activities, permitting time lines, hedging practices, currency exchangerate fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipatedreclamation expenses, timing and possible outcome of pending litigation, title disputes or claims and limitations on insurancecoverage. 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 notanticipate”, “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 bematerially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related tothe integration of acquisitions; risks related to international operations; risks related to joint venture operations; actual results ofcurrent exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes inproject parameters as plans continue to be refined; future prices of gold, silver, copper, lead and zinc; possible variations in orereserves, 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 otherrisks of the mining industry, as well as those factors discussed in the section entitled “Description of the Business – Risk Factors” inGoldcorp’s annual information form for the year ended December 31, 2011 available at Although Goldcorp hasattempted to identify important factors that could cause actual results to differ materially from those contained in forward-lookingstatements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be noassurance that such statements will prove to be accurate, as actual results and future events could differ materially from thoseanticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Goldcorpdoes not undertake to update any forward-looking statements that are included in this document, except in accordance withapplicable securities laws. All amounts are in U.S. dollars, unless otherwise stated.2
  3. 3. Consistent Strategic Focus Growth Leader Low Low Cost Political TOGETHER, Producer Risk CREATING SUSTAINABLE VALUE Responsible Outstanding Mining Balance Practices Sheet3
  5. 5. Financial Position - Excellent Liquidity INVESTMENT GRADE BALANCE SHEET1 CASH FLOW / SHARE3,5 (US$ / share) (US$) as at Sept. 30, 2012 $3.35 $2.30 $1.62 CASH & CASH EQUIVALENTS2 $894 M $1.23 $1.32 2007 2008 2009 2010 2011 AVAILABLE DEBT FACILITY - UNDRAWN $2.0 B EARNINGS / SHARE4,5 (US$ / share) $2.22 $1.43 CONVERTIBLE SENIOR NOTES - DUE 2014 $862.5 M $0.80 $0.62 $0.56 LIQUIDITY ~$2.9 B 2007 2008 2009 2010 20111 Moody’s: Baa2; S&P: BBB+; Fitch: BBB. 2 Includes money market instruments, non-GAAP measure3 Cash flow before changes in working capital (from continuing operations as applicable). 4Adjusted earnings per share. 5Non-GAAP financial measures see pages 29-95 of the 2011 Annual report for further details.5
  6. 6. Significant Return of Capital to Shareholders DIVIDEND AS % OF OPERATING CASH FLOW 23% 19% 18% 17% 17% 14% 13% 12% 12% 12% 12% 9% Newmont Goldcorp Yamana Newcrest Barrick Kinross 2012E 2013ESource: Bloomberg consensus (as of Dec. 5, 2012)6
  7. 7. Quality Gold Reserve Growth 2012 Exploration Budget 64,700 Increased to $226M 60,060 (Thousands of ounces) 48,800 46,300 43,400 2007 2008 2009 2010 20117
  8. 8. Q3 2012 Highlights - Record Revenues Q3 2012 Actual Revenues $1,538 M Gold Production 592,500 oz Cash Costs $/oz – By-Product $220 – Co-Product $660 Adjusted Net Earnings $441 M Operating Cash Flow1 $687 M1Cash flow before changes in working capital8
  9. 9. 2012 Guidance 20121 Updated Guidance Gold Production (koz) 2,350 - 2,450 - Red Lake (koz) 460 - 510 - Peñasquito 370 - 390 Cash Costs $/oz – By-product $310 - $340 – Co-product $625 - $650 Capital Expenditures $2.7 B Exploration Expenditures $226 M Tax Rate 28%1 2012 price assumptions: Au=$1600/oz, Ag=$34/oz, Cu=$3.50/lb, Zn=$0.90/lb, Pb=$0.90/lb9
  10. 10. Focus in Low Risk Jurisdictions 2012E GOLD PRODUCTION CANADA Dominican Republic Argentina 2% USA 6% Canada 44% Guatemala 9% DOMINICAN REPUBLIC MEXICO GUATEMALA Operating Mines Mexico Development Projects 34% US 5% CHILE ARGENTINA10
  11. 11. Pueblo Viejo - Dominican Republic New Source of Gold Production • First gold production achieved • 2012E gold production – 53,000 ounces • $350 million* capital budget for 2012 DOMINICAN REPUBLIC • Annual output 415,000 to 450,000 ounces per year* in first five years • Life of mine +25 years 40 *Goldcorp interest (%)11
  12. 12. Cerro Negro - Argentina Developing our Next Cornerstone Mine • High grade vein system • Outstanding reserve growth potential • Santa Cruz mining province Updated feasibility study1 results: • 550 koz Au annually (1st 5 years) • <$300/oz cash costs (1st 5 years) • First production late-2013 Alumbrera El Morro1Cerro Negro feasibility study – April 2011 Cerro Negro12
  13. 13. Cerro Negro - Argentina Construction on Schedule • Eureka decline advanced to 1,962 M  Ore stockpile of ~25,150 tonnes at expected grades of 10.79 g/t Au and 225 g/t Ag • Mariana Central & Mariana Norte declines underway • Construction & development activities advancing:  Plant construction • Equipment & material imports progressing well • Strong exploration results continue13
  14. 14. Éléonore - Canada Pure Gold in a Safe Jurisdiction Musselwhite Red Lake Éléonore • Development plan: Cochenour Porcupine  Upper/lower mine concept; 7 ktpd  Mine life ~15 years  +600,000 oz Au  Cash costs: <$400/oz • Gaumond exploration shaft completed • Exploration ramp extended over 2,000m • Production shaft sinking expected in Dec. 201214
  15. 15. El Morro - Chile Long Term Strategic Asset • Large, under-explored land position • Construction deferred pending: • Reinstatement of permits • Project optimization • Power solution • Updated capital estimates Alumbrera El Morro Goldcorp interest (%) 70 Cerro Negro15
  16. 16. Cochenour - Canada Key Growth Driver in Red Lake District Musselwhite Red Lake Éléonore Cochenour • Shaft widening advancing Porcupine • Haulage drift 60% complete end of Q3 • Construction underway • Exploration advancing with 2 drills from surface and 2 from haulage drift • Development plan update underway16
  17. 17. Red Lake West East Western Rahill - Bonanza Discovery Zone Drift location at end of 2012 Current drift location Bruce Channel Discovery Haulage drift17
  18. 18. Red Lake - Canada Cornerstone Asset Musselwhite Éléonore Red Lake Cochenour Porcupine • Robust, low cost gold production • 2012E gold production  460,000 - 510,000 ounces • 2012 exploration budget $44M  High Grade Zone extension  NXT zone delineation • Long term gold production forecast under review18
  19. 19. Red Lake - High Grade Zone Drilling Closing the gap – up dip potential 7.31oz/2.0’ * 47L 4.65oz/1.0’ * Planned drift NXT Zone 0.41oz/1.2’ 0.15oz/1.7’ 0.58oz/3.2’ 1.64oz/3.5’ 0.87oz/10.0’ 2.42oz/4.5’ 52L 1.08oz/4.8’ 0.43oz/6.6’ 1.83oz/3.5’ 2.44oz/21.8’ Drill Bay 2.86oz/12.3’ #22 3.87oz/6.6’ Current 4699 Ramp New Intercept* 57L Development 17.24/2.5’ Historic Deep Intercept* 4.31 oz/4.8’*Note some intercepts may appear to intersect lower elevation than they actually are due to oblique view**Selected intercepts are shown View Looking NE19
  20. 20. Peñasquito - Mexico Mexico’s Largest Gold Producer • 2012E gold production  370,000 - 390,000 ounces El Sauzal • Long term water management study Peñasquito underway Los Filos • Focus on efficiencies & cost reductions • Largest cash flow generator in 2012 • 22-year mine life20
  21. 21. Peñasquito - Exploration Success Advancing District Opportunity • Camino Rojo  Testing oxide & sulphide expansion  Internal study completed in Q3  Focus on permitting and further development activities21
  22. 22. Why Gold? Gold Price ($) 2,000 422% increase over 2002 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Dec 2002 Safe haven/ Inflation asset class hedge China factor Stable investment demand Growing Continued Currency physical debasement of Flat mine demand Central bank protection international supply buying currenciesSource: Bloomberg data Dec. 5, 2002 – Dec. 5, 201222
  24. 24. Appendix A - 2012 Sensitivities By Product Change CFPS FCF Base Price Cash Costs Increments ($/share) ($mm) ($/oz) Gold Price ($/oz) $1,600 $100 $0.23 $2 $186 Silver Price ($/oz) $34.00 $2.00 $0.05 $23 $41 Copper Price ($/lb) $3.50 $0.50 $0.03 $14 $25 Zinc Price ($/lb) $0.90 $0.10 $0.03 $16 $28 Lead Price ($/lb) $0.90 $0.10 $0.02 $8 $15 Canadian Dollars 1.00 10% $0.04 $17 $118 Mexican Peso 13.00 10% $0.04 $17 $41 Diesel ($/barrel) $95.00 10% $0.01 $6 $12 Electricity ($/kWh) $0.08 10% $0.02 $9 $1624
  25. 25. Appendix B - Operating Costs Breakdown CONSOLIDATED 11% 22% 4% 5% 2% 15% 14% 10% 7% 10% Labour Contractors Fuel Costs Power Maintenance Parts Consumables Tires Explosives Site Costs Others CANADA / USA MEXICO CSA 4% 12% 13% 6% 15% 18% 2% 1% 4% 4% 10% 38% 14% 6% 6% 8% 1% 2% 9% 8% 7% 16% 6% 18% 5% 12% 14% 19% 9% 13%25
  26. 26. Endnotes 1. Goldcorp has included non-GAAP performance measures, total cash costs, by-product and co-product, per gold ounce, throughout this presentation. 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 revenues for Alumbrera; by-product silver revenues for Marlin at market silver prices; by-product lead, zinc and 75% of the silver for Peñasquito at market silver prices and 25% of the silver for Peñasquito at $3.90 per silver ounce sold to Silver Wheaton). 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. The Company follows the recommendations of the Gold Institute Production Cost 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. Total cash costs on a by-product basis are calculated by deducting by- product copper, silver, lead and zinc sales revenues from production cash costs. Production costs in 2012 are allocated to each co-product based on the ratio of actual sales volumes multiplied by budget metals prices of $1,600 per ounce of gold, $34 per ounce of silver, $3.50 per pound of copper, $0.90 per pound of lead and $0.90 per pound of zinc, rather than realized sales prices. 2. All Mineral Reserves and Mineral Resources have been calculated as at December 31, 2011 in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101, or the AusIMM JORC equivalent. Calculations of Mineral Reserves and Mineral Resources, as well as other scientific and technical information concerning Goldcorp’s mineral properties contained in this presentation, is based upon information that has been prepared by employees of Goldcorp, its joint venture partners or its joint venture operating companies, as applicable, under the supervision of Maryse Belanger, Senior Vice-President, Technical Services, who is qualified person under National Instrument 43-101. 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 or the relevant technical reports on file with Canadian provincial securities regulatory authorities and the U.S. Securities and Exchange Commission. 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. 3. Goldcorp’s exploration programs are designed and conducted under the supervision of Charlie Ronkos, Senior 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.26