Red Lake mine powers on

Fourth quarter production of 138,451 oz. of gold pushed GoldCorp‘s (G-T) annual gold production to a record 607,403 oz. in 2001.

The bulk of production came from the flagship Red Lake mine in northwestern Ontario where 113,694 oz. were poured at a cash cost of US$60 per oz. during the three months ended Dec. 31. For the year, Red Lake turned out 503,385 oz. at a cash cost of US$59 apiece. The Wharf heap-leach mine in South Dakota chipped in 24,757 oz. at US$217 per oz. and 104,018 oz. at US$212 each during the respective periods. Both operations showed an improvement in performance compared to the corresponding periods of 2001.

Overall, GoldCorp’s average cash cost came in at US$86 for the quarter and US$85 per oz. for the year, both well below 2001 figures. The company realized and average of US$278 per oz. for its quarterly production and US$271 per oz. for all of 2001.

Fourth quarter earnings tallied to US$12.2 million (or 14 per fully diluted share), compared with a year-ago loss of US$13.6 million (17 per share). Revenue climbed to US$39 million from US$25.7 million. Cash flow from operations nearly tripled to US$22.7 million from US$8.7 million.

For the year, the company’s earnings were US$52.8 million (63 per share) on revenue of US$165.7 million, compared with a loss of US$19.3 million (24 per share) on US$61.3 million the previous year.

GoldCorp expects to produce about 570,000 oz. at less than US$100 per oz. in 2002. The decrease relative to 2001 is owing to plans drop production slightly to allow for development work in support of exploration at the Red Lake mine. Red Lake’s 2002 contribution is forecast at 475,000 oz. at less than US$70 each. Wharf will make up the difference at an estimated cash cost of about US$220 per oz.

Exploration plans at Red Lake in 2002 focus on four principal targets. Work will aim at testing for: vertical continuity of all zones comprising the HGZ; lateral extensions of the HGZ to the east and west; extensions of the lower grade sulphide mineralization at depth; and continuation of Far East mineralization to the east.

With continuing success at Red Lake, GoldCorp says it intends to pay a dividend of 20 per share in quarterly payments of a nickel beginning in the first quarter. Shareholders will have the option of receiving the payment in U.S. or Canadian funds, or in gold bullion. During the fourth quarter, GoldCorp increased its gold bullion holdings to 35,000 oz. from 28,000 oz.

At the end of 2001, Goldcorp had US$78.1million in cash and short-term investments, up from US$17.1 million a year earlier.