Goldcorp denver sept


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Goldcorp denver sept

  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 BALANCE SHEET (US$) as at June 30, 2012 CASH & CASH EQUIVALENTS1 $1.2 B INVESTMENT AVAILABLE DEBT $2.0 B GRADE FACILITY - UNDRAWN BALANCE SHEET2 CONVERTIBLE SENIOR NOTES - DUE 2014 $862.5 M LIQUIDITY ~$3.2 B1 Includes money market instruments, non-GAAP measure2 Moody’s: Baa2; S&P: BBB+; Fitch: BBB5
  6. 6. Low Exposure to Capital Inflation (as at June 30, 2012) Capital Spending for Projects Contributing to 5-Year Growth Profile $2.4 B $2.0 B $0.5 B SPENT COMMITTED OUTSTANDING LOW CAPITAL COST / OZ OF <$170* Contributing to 5-year growth: Pueblo Viejo, Cerro Negro, Éléonore, Cochenour and Camino Rojo6
  7. 7. Sector Leading Cash Margins ($ per oz) $1,652 $1,572 $1,240 $978 $868 $1,342 $1,349 $703 $966 $563 $683 $540 $305 $295 $274 $223 $310 $163 2007 2008 2009 2010 2011 YTD - Q2 By-Product Cash Costs Cash Margin7
  8. 8. Strong Cash Flow Growth (12E – 15E) 80% 69% 70% $2.86 - $4.84 60% 50% 40% 34% 31% $1.49 - $2.00 $2.23 - $2.91 30% 20% 14% 9% 9% $6.56 - $7.49 10% $3.77 - $4.10 $5.82 - $6.35 -5% $1.30 - $1.23 0% -10% Kinross Agnico Barrick Newmont Newcrest* Yamana GoldcorpSource: Bloomberg Consensus (as of August 29, 2012)Dollar figures are cash flow per share estimates 2012 – 2015*Newcrest data uses June year end8
  9. 9. Significant Return of Capital to Shareholders DIVIDEND AS % OF OPERATING CASH FLOW 21% 19% 18% 17% 16% 13% 13% 14% 12% 12% 12% 10% Newmont Goldcorp Yamana Newcrest Barrick Kinross 2012E 2013ESource: Bloomberg consensus (as of August 29, 2012) Company reports9
  10. 10. 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 201110
  11. 11. Q2 2012 Highlights Q2 2012 Revenues $1,113 M Gold Production 578,600 oz Cash Costs $/oz – By-Product $370 – Co-Product $619 Adjusted Net Earnings $332 M Operating Cash Flow1 $520 M1Cash flow before changes in working capital11
  12. 12. 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/lb12
  13. 13. Focus in Low Risk Jurisdictions 2012E GOLD PRODUCTION CANADA Dominican Republic Argentina 3% USA 6% Canada 43% Guatemala 9% DOMINICAN REPUBLIC MEXICO GUATEMALA Operating Mines Mexico Development Projects 34% US 5% CHILE ARGENTINA13
  14. 14. Pueblo Viejo - Dominican Republic New Source of Gold Production • First gold production achieved • 2012E gold production of between 68,000 to 85,000 ounces DOMINICAN REPUBLIC • $350 million* capital budget for 2012 • Annual output 415,000 to 450,000 ounces per year* in first five years • Life of mine +25 years 40 *Goldcorp interest (%)14
  15. 15. Cerro Negro - Argentina Developing our Next Cornerstone Mine • High grade vein system • Outstanding reserve growth potential • Santa Cruz mining province Updated feasibility study results: • 550 koz Au annually (1st 5 years) • <$300/oz cash costs (1st 5 years) • Initial capital $800M Alumbrera • First production late-2013 El Morro Cerro Negro15
  16. 16. Cerro Negro - Argentina Construction on Schedule • Eureka decline advanced to 1,812 M  Ore stockpile of ~12,010 tonnes at expected grades of 10.32 g/t Au and 213 g/t Ag • Mariana Central & Mariana Norte declines underway • Construction & development activities advancing:  Plant construction • Equipment & material imports progressing well • Strong exploration results continue16
  17. 17. 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 • Final EIA approval received • Cree collaboration agreement17
  18. 18. Éléonore - Canada Advancing Construction • Exploration shaft past 701 metres • Exploration ramp extended over 1,500 metres • Underground drilling commenced • Plant construction to commence Q3’12 • Foundations for production shaft completed and structural steel erection activities commenced  Full face shaft sinking expected in Dec. 201218
  19. 19. El Morro - Chile Next Generation Project • Large, under-explored land position • Jan. 2012 feasibility study update:  First production: 2017  +210,000 Au1; +200Mlb Cu1  By-product cash costs: ($700)/oz2  Capital cost $3.9B  17-year mine life • Assessing effect of Supreme Court decision Alumbrera12 LOM Average annual production (70%) Price Assumptions: Au - $1200/oz; Cu - $2.75/lb El Morro Goldcorp interest (%) 70 Cerro Negro19
  20. 20. Cochenour - Canada Key Growth Driver in Red Lake District Musselwhite Red Lake Éléonore Cochenour • Shaft widening advancing Porcupine • Haulage drift 51% complete • Construction underway • Exploration advancing with 2 drills from surface and 2 from haulage drift • Development plan update underway20
  21. 21. Red Lake West East Western Rahill - Bonanza Discovery Zone Drift location at end of 2012 Current drift location Bruce Channel Discovery Haulage drift21
  22. 22. Red Lake - Canada Cornerstone Asset Musselwhite Éléonore Red Lake Cochenour Porcupine • Robust, low cost gold production • 2012 gold production forecast  460,000 - 510,000 ounces • 2012 exploration budget $44M  Focus on High Grade Zone extension • Long term gold production forecast under review22
  23. 23. Red Lake - High Grade Zone Drilling New Zone Identified 7.31oz/2.0’ *47L 4.65oz/1.0’ * Drift in progress 0.49oz/6.0’ 0.48oz/12.0’ 0.41oz/1.2’ 0.15oz/1.7’ 0.59oz/7.6’ 0.58oz/3.2’ 1.64oz/3.5’ 0.87oz/10.0’ 2.42oz/4.5’52L 1.08oz/4.8’ 1.142oz/4.3’ 0.43oz/6.6’ 1.83oz/3.5’ 2.44oz/21.8’ Drill Bay 1.39oz/7.7’ #22 2.86oz/12.3’ Drilling supports 3.87oz/6.6’ Current 4699 Ramp continuation of HGZ at depth New Intercept*57L Development 3.32oz/1.5’ 17.24/2.5’ Historic Deep Intercept* 4.31 oz/4.8’*Note some intercepts may appear to intersect lower elevation than they actually are due to oblique view23
  24. 24. Peñasquito - Mexico Mexico’s Largest Gold Producer • 2012 gold production forecast  370,000 - 390,000 ounces El Sauzal • Supplemental feed system Peñasquito commissioned Los Filos • Focus on efficiencies & cost reductions • Largest cash flow generator in 2012 • 22-year mine life24
  25. 25. Peñasquito - Exploration Success Advancing District Projects • Camino Rojo  Over 77,000 metres drilled in 2011  Testing oxide & sulphide expansion  Feasibility study due Q3’12 • Noche Buena  Resource expansion drilling continues  In-fill drilling on higher grade mineralization trends  Feasibility study due Q3’1225
  26. 26. Why Gold? Gold Price ($) 428% increase over 2002 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Aug 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 Aug. 29/02 – Aug. 29/1226
  28. 28. 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 $1628
  29. 29. 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%29
  30. 30. 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. 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, Vice President, 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, 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.30