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Goldcorp Inc. said it is spending US$570 million this year on its Éléonore mine in Quebec’s James Bay region to get it into initial production of 40,000 to 60,000 ounces in the final quarter.
The new mine has a total capital cost of $1.8 billion to $1.9 billion, up from the last estimate of $1.75 billion, and targets average annual output of 600,000 ounces, Goldcorp CEO Chuck Jeannes said Thursday. (All figures are in US dollars.)
“We’re counting on strong cash flow from our other gold mines, including Red Lake in Ontario, with 2014 output of 440,0000-480,000 ounces, and Penasquito in Mexico with 530,000-560,000 ounces, to provide the liquidity to fund Éléonore and our other projects requiring total capital spending of $2.3 billion to $2.5 billion,” he said in a quarterly update.
Also, Goldcorp has a $2-billion undrawn credit facility available, he added. Overall, Goldcorp expects to produce 3 million to 3.15 million ounces in 2014, up 13 per cent to 18 per cent from 2013, and targets 3.5 million to 3.8 million ounces in 2018.
It will spend $190 million on exploration this year, mainly to replace reserves, and maps a 15-20 per cent decline in all-in sustaining cash production costs over the next two years.
In the fourth quarter, total production hit a record 767,000 ounces from its mines in the Americas. The company has a market valuation of more than $18 billion.
“We met our cost targets despite lower realized metal prices,” Jeannes said. “Once Éléonore and Cerro Negro in Argentina are producing, capital spending will decline significantly.”
Goldcorp also produces silver, zinc and lead as by-products from gold mining, reducing gold production costs.
Éléonore’s construction program is on schedule for the fourth-quarter startup and the production shaft has reached 705 metres, Jeannes said. The exploration ramp is 4,322 metres long and drilling will be focused on expanding known reserves.
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