Goldcorp continues Red Lake development

Though focused on developing its Red Lake mine in northwestern Ontario, Goldcorp (G-T) has also managed to turn a small profit at its operations elsewhere in North America.

For the first nine months of 1999, the Toronto-based company posted earnings of US$1.7 million (or 2 cents per fully diluted share) on revenue of US$39.1 million, compared with a loss of US$1.3 million (2 cents per share) on revenue of US$44.4 million in the corresponding period last year.

About 58% of the revenue was derived from gold mining, with the remainder coming from two industrial minerals operations: Havelock Lime in New Brunswick and Saskatchewan Minerals.

In the third quarter, Goldcorp earned US$800,000 on revenue of US$14.4 million, compared with a loss of US$400,000 on revenue of US$14.6 million a year ago.

Over the recent 9-month period, Goldcorp sold 83,876 oz. gold at an average realized price of US$271 per oz., compared with the 86,096 oz. sold at US$294 per oz. during the corresponding period last year. The company has no hedged production.

During the recent nine months, the Wharf mine in South Dakota produced 83,135 oz. gold from 3.2 million tons grading 0.034 oz. gold per ton. Total cash costs were US$205 per oz.; total operating costs, US$221 per oz.

By comparison, the first nine months of 1998 saw 88,128 oz. produced from 3.4 million tons grading 0.032 oz. gold per ton at a total operating cost of US$218 per oz.

At Sept. 30, Goldcorp’s cash and short-term investments totalled US$41.4 million, while its working capital stood at US$51.8 million. The company says it is seeking another US$35 million (through debt or an asset sale, or a combination of the two) to finance further development of the Red Lake mine and augment its working capital.

Construction and development of the High Grade zone at Red Lake is proceeding on budget and on schedule, with startup slated for late 2000 (T.N.M., Sept. 27-Oct. 3/99).

At surface, the mill has been enclosed, the tailings work is finished and the administration and warehouse buildings are almost completed.

Underground, there have been several advancements:

• hoist and cable projects have started;
• a ventilation raise, a waste pass and pipe work have been completed at the 34 level;
• the maintenance shop, ore pass and fuel bay are near completion;
• the main ramp has been developed from Level 30, to 180 ft. below Level 31; and
• backfill engineering has begun.

During the 9-month period, there was no progress in the bitter standoff between Goldcorp management and the Red Lake mine employees, who have been on strike since 1996. The company, which employs contract workers for the development work, says it is prepared to employ contractors to carry out production.