 TORONTO (miningweekly.com) – With its huge Penasquito mine in Mexico on track for commercial production in the third quarter of this year, and Pueblo Viejo – co-owned with larger rival Barrick – scheduled to start up in the Dominican Republic late next year, Canada's Goldcorp is looking at the next slate of projects to boost gold output and take advantage of high prices.
Goldcorp, the second-biggest gold miner by market value, expects to green-light its nine-million-ounce Eleanore underground project, in Quebec, before the end of 2010.
And it could also be ready by that time to start construction at another large project - the El Morro copper/gold mine in Chile, CEO Chuck Jeannes said on Friday.
If all goes to plan, both operations could start production in 2015.
This week, Goldcorp announced details of a prefeasibility study for Eleanore, estimating upfront capital for the project at around $880-million, with average annual production forecast at 330 000 oz/y.
At below $400/oz, the project's cash costs will be lower than a lot of new gold mines being brought on line in the next few years, Jeannes said.
The prefeasibility document estimates a 16-year mine life, but that is based on 2008 resource figures, and does not include a significant increase in inferred resources that Goldcorp announced earlier this year, he pointed out.
The project now has an estimated 3,15-million ounces of gold in measured and indicated resources, plus 6,25-million ounces in the inferred category.
Over the remainder of this year, the prefeasibility study will be updated to include the new resource numbers, and the company is also looking at a number of optimisations to improve the economics of the project.
“Eleanore is a very large mineral system, but it is deep, and a lot of the better grades are towards the bottom of the deposit, rather than near the surface,” Jeannes said.
“So that represents some challenges. But the fact that we are investing nearly $100-million again this year should give a sense that we are quite confident...that we are going to end up with a new Goldcorp mine.”
Collar excavation will begin this month on a 725-m-deep exploration shaft at Eleanore, with sinking expected to continue until the third quarter of 2012.
Also in Canada, Goldcorp is also making progress on a three-year project to access the high-grade Cochenour project, at its Red Lake camp, in Ontario.
The company plans to upgrade and expand the existing Cochenour shaft and build a 5,5-km high-speed tram that will transport ore from Cochenour for processing at the Red Lake milling facility.
EL MORRO
At El Morro, the company has put together a project team and has begun looking at optimising the feasibility study completed by previous owner Xstrata, Jeannes said.
Goldcorp bought 70% of the project earlier this year from Xstrata with the help of New Gold, which owns the other 30% and had a right of first refusal on Xstrata's stake.
The company is moving ahead with development plans despite a legal challenge by bigger rival Barrick Gold, which had agreed in 2009 to buy the project from Xstrata.
Jeannes believes the company could receive construction permits for El Morro as early as this year, which would allow for a 2015 start-up, he said.
“That's the general schedule that we are looking at,” he told analysts and investors on a conference call.
SATELLITE PLANS
Jeannes is also moving ahead with plans to develop satellite operations in Mexico, around the $1,6-billion Penasquito mine.
He plans to create a network of low-cost mines around Penasquito to supplement production from the mill and take advantage of infrastructure and other investments that Goldcorp has made in the region.
The company has discovered a new deposit, Noche Buena, which already has measured and indicated resources of 530 000 oz of gold and 18,4-million ounces of silver, as well as 240 000 gold ounces and two-million silver ounces in the inferred category.
Another addition to the Penasquito network is the Camino Rojo project, which Goldcorp bought this year by acquiring junior Canplats Resources.
The Represa deposit at Camino Rojo has reported measured and indicated resources of 3,45-million gold ounces and 60,71-million silver ounces, while inferred resources total 555 000 oz of gold and 7,61-million ounces of silver.
Shares in Goldcorp slid 1,91% on Friday, to C$40,09 apiece by 16:20 in Toronto.
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