Record production at Red Lake drives Goldcorp

Thanks to a full year’s worth of production from the Red Lake mine in northern Ontario, Goldcorp (G-T) has set a new annual production record.

The gold miner cranked out 607,403 oz. last year at a cash cost of US$85 per oz. The bulk of its production came from Red Lake, which was officially reopened in October 2000.

The flagship mine poured 503,385 oz. of the yellow metal last year, at a cash cost of US$59 per oz. Of that, 113,694 oz. were produced in the final three months of the year.

Goldcorp also runs the Wharf heap-leach mine in South Dakota, which contributed 104,018 oz. to the company’s annual production. Cash costs over the year averaged US$212 per oz.

For 2002, Goldcorp expects to produce about 570,000 oz. at less than US$100 per oz. The decrease from 2001 reflects the decision to curtail development at Red Lake in favour of exploration.

Exploration will focus on the vertical continuity and lateral extensions of the producing High Grade zone, depth-extensions of the lower-grading sulphide zone, which was mined historically, and eastern strike extensions of the newly discovered Far East zone. Consequently, Red Lake is expected to produce just 475,000 oz. in the current year, at less than US$70 per oz.

The 95,000 oz. of projected output from Wharf is expected to cost just under US$21 million to produce.

In the final three months of 2001, Goldcorp earned US$12.2 million (or 14 per share) on revenue of US$39 million, compared with a loss of US$13.6 million (17 per share) on US$25.7 million in the corresponding period of 2000. Cash flow nearly tripled to US$22.7 million.

Earnings in all of 2001 topped US$52.8 million (63 per share) and revenue, US$165.7 million. This is far better than 2000, when Goldcorp lost US$19.3 million (24 per share) on US$61.3 million in revenue.

Goldcorp intends to pay quarterly dividends of 5 per share in 2002. Shareholders can elect to receive the payment in U.S. or Canadian funds, or in gold bullion.

At the end of 2001, Goldcorp had US$78.1 million in cash and short-term investments, which is US$61 million more than it had at the end of 2000.

Subject to shareholder approval, Goldcorp will split its shares on a 2-for-1 basis. Shareholders will vote on the matter at the company’s annual meeting on March 21.

Goldcorp currently has just over 82.5 million shares outstanding, or 89.8 million on a fully diluted basis.