NEVADA & THE WESTERN STATES — Wharf mine a solid producer for Goldcorp

While most of the attention directed toward Goldcorp (G-T) is related to its Red Lake development in Ontario, the Toronto-based company has been quietly cranking out gold at its expanded Wharf mine in South Dakota.

The open-pit, heap-leach operation is in South Dakota’s Black Hills region, about 5 miles south of the Homestake mine.

With Goldcorp as 100% owner and operator, Wharf has been in commercial production since 1983. Production to date exceeds 1.1 million oz.

A year ago, Wharf received final approval from the South Dakota Department of Environment and Natural Resources to increase its permitted area and mine the adjacent Clinton project, with Clinton ore being processed at the existing Wharf facilities.

With this approval, Wharf’s gold reserves jumped to 1.03 million oz. from 541,000 oz. At the end of 1998, proven and probable reserves stood at 33 million tons grading 0.031 oz. gold per ton with a further resource of 2.8 million tons of 0.034 oz. gold. Wharf’s mine life has also increased, to eight years.

“The downside of the Clinton project is that the stripping ratio will be higher than on the existing site,” says Goldcorp President Rolando Francisco.

In 1998, Wharf increased its annual production by 7,030 oz., to 110,175 oz. gold. At the same time, the mine lowered its cash production cost to US$190 per oz. from US$226.

However, the realized price for gold sold in 1998 was US$294 per oz., compared with US$326 a year earlier. As a result, Goldcorp’s revenues from gold bullion were US$31.8 million in 1998, down from the US$34.5 million recorded in 1997.

During the first quarter of 1999, Wharf produced 22,224 oz. gold at a cash production cost of US$199 per oz. and a total operating cost of US$234 per oz.

This compares with 30,898 oz. at US$194 per oz. and a total cost of US$221 per oz. in the corresponding period last year.

Goldcorp generated US$6.6 million in revenue from gold bullion sales in the recent first quarter, compared with US$7.9 million a year ago.

In other news, the mine has recently received regulatory approval for a surface-water discharge permit. Last year’s exploration program at Wharf added some reserves to the American Eagle zone, and work this year is focusing on the surrounding area.