Goldcorp Inc Follow-Up #8

THE TIMELESS PRECIOUS METAL FUND 

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THE WORLD’S LOWEST-COST MILLION-OUNCE PRODUCER

Business Summary

Goldcorp is the world’s lowest-cost million-ounce gold producer with safe, profitable and sustainable mining operations throughout the Americas and in Australia.

Production in 2005 is expected to exceed 1.1 m ounces at a cash cost of less than US$60 per ounce.

The company has a strong balance sheet, no debt and no hedging.

Goldcorp expects a 40% increase in production to 1.6 m ounces of gold in 2007 due to organic growth, and the company also intends to grow through acquisition.

CANADA

Red Lake Mine is Canada’s largest gold mine and one of the world’s richest and lowest cost gold producing operations. 

The mine, located in Northern Ontario, produces in excess of 550,000 ounces of gold annually at costs under $100/oz. A new shaft, to be ready in 2007, will increase hoisting capacity, reduce time to access the workplaces, and provide significant cost savings and by 2008 production is expected to increase to more than 700,000 oz.

The implementation of innovative mining techniques, as well as improvements and refinements to other areas of the operation, have been key to the success of the mine in the last four years.

Goldcorp has implemented the use of new Virtual Reality (VR) technology for mine design and planning purposes, and has recently built a state-of-the-art VR studio on site.

Goldcorp is spending $132 million on a new 7,150 ft. deep shaft currently under construction.  

USA

Wharf Resources (USA) Inc. operates the Wharf open-pit gold mine and heap-leach operation in the Bald Mountain Mining District of South Dakota.

The mine has been operating successfully since 1983 and has achieved major milestones in health and safety, and progressive reclamation of previously mined areas. The mine’s reserves are projected to be depleted early in 2007 with leaching winding down over that year.     

Wharf’s vision is to maximize the production potential of the operation over the remaining two to three years while responsibly planning for closure and rehabilitation to the highest possible standards. 

MEXICO

Luismin owns and operates three gold and silver mines, and holds numerous exploration projects throughout Mexico.

The three mines are San Dimas, on the border of Durango and Sinaloa states, San Martin in the state of Queretaro and Nukay, a very small operation acquired with Los Filos, which is located in the state of Guerrero. The three mines hold 78 exploration and exploitation concessions with a total area of approximately 36,312 hectares. This extensive land area covers the mines, as well as the most prospective surrounding areas and forms an important asset for Luismin’s future exploration programs.

Luismin has a long history of mining in Mexico, with some of the current operations dating back to the 1890s. Luismin has an experienced management team and a proven record of increasing production while maintaining reserves over long periods of time.

The Los Filos Gold Project is a development project in southern Mexico.

Preliminary drilling, metallurgical testing and several scoping studies have been completed on this project.

A definitive feasibility study is underway, which will include the Bermejal Gold deposit located 2 km to the south. Testwork completed so far indicates run of mine heap leaching is the preferred processing method.

During 2004 almost 18,000 metres of core drilling was completed, primarily to provide metallurgical samples, improve geotechnical information, increase resource confidence.

Goldcorp plans to immediately commence further metallurgical, geotechnical, and engineering studies towards developing Los Filos and Bermejal into one comprehensive mining operation.

Environmental activities are well advanced and the initial sustainable development program has been completed. Approximately 75% of the heavy mining equipment fleet has been purchased and commitments for the acquisition of additional equipment have been made.

Capital expenditures in 2004 were $10.9 million, in line with the budget. Further capital expenditure will be committed to continue development (more information will be available in future financial statements).

ARGENTINA

Alumbrera is one of the world’s largest and lowest cost gold and copper operations with cash costs in the lowest quartile of producers. Located in north western Argentina, Alumbrera was Argentina’s largest and first major mining development.

Alumbrera’s average annual production has increased over the past few years to approximately 720,000 tonnes of concentrate containing about 200,000 tonnes of copper metal and about 650,000 ounces of gold.

These higher production levels are expected to be generally maintained (but gradually declining) until the end of the decade, followed by a shorter period of lower production during the processing of lower grade stockpiles.

Alumbrera provides ongoing direct and indirect economic benefits to a range of stakeholders and local communities. Developed by MIM Holdings (an Australian company) and its partners over two years at a cost of US$1.2billion the mine commenced production in February 1998. The operation repaid its capital cost in the first half of 2004.

In 2003 Xstrata acquired MIM Holdings and Wheaton River Minerals increased its shareholding in the project, resulting in the current ownership structure:

• Xstrata (operator) 50.0%
• Goldcorp Inc 37.5%
• Northern Orion 12.5%

Located at an elevation of 2,600m, the Alumbrera open pit mine is situated on a 600 hectare mining lease.

BRAZIL

The Amapari Gold Project, located in Amapa State, Brazil, is in construction and expected to start up in the second half of 2005.

The project consists of an open pittable heap leach oxide deposit and a deeper sulphide deposit. Initial development will comprise an open pit mine and heap leach plant for exploitation of the oxide part of the deposit at a capacity of 2.5 Mt/a. Conventional open pit mining techniques using a shovel/truck operation will be employed. The heap leach process will utilize an innovative on/off heap leach pad, using a stacker and reclaimer.

Total construction capex for start up is estimated at US$ 54 million. Gold will be produced at a rate of 188,000 oz/year at a cash cost of US$144/ounce. Metallurgical recovery is forecast at 90%, based on bench and field pilot plant tests.

After completion of open pit mining, Amapari will begin underground mining to extract the sulphide reserves that extend immediately below the oxide mineralization. Underground ore is planned to be exploited by the sub level stoping method at a production rate of 1.0 Mt/a. The sulphide ore will be treated by a conventional carbon-in leach (CIL) plant with metallurgical recovery forecast at 94%.

Gold will be produced at a rate of 136,000 oz/year at a cash cost of US$195/ounce.

Total construction capex required for this phase of the project is estimated to be US$ 53 million. Studies are already underway to investigate more optimal development of the deeper sulphides by open pit that could reduce capital and operating costs.

As of March 31, 2005, the project contains 1.53 million ounces of gold in proven and probable reserves, 0.20 million ounces in measured and indicated resources, and 1.11 million ounces in inferred resources ounces of gold over an 11 year mine life.

AUSTRALIA

Peak Gold mine is a gold mining operation located in the Cobar Gold Field of Central West New South Wales, Australia. Peak Gold Mines produces approximately 140,000 ounces of gold per year.

This operation consists of several underground and open pit ore bodies located on the eastern margin of the Cobar Basin. Mining in this region commenced in 1870 and the orebodies currently being mined by Peak Mine are New Occidental, New Cobar and Perseverance. Peak also holds an extensive exploration portfolio in the Cobar region and has recently acquired highly prospective tenements along strike of the existing workings.

Peak continues to add value to the operation at Cobar through new infrastructure, improved mining methods and mill enhancements. The mine’s original design capacity of 450,000 tonnes per year was increased to 663,000 tonnes in 2004 with plans to ultimately increase capacity to more than 750,000 tonnes per year.

The estimated mineral resources for Peak total more than 4.3 million tonnes containing more than 1.3 million ounces of gold. If all of this resource can be converted to reserves, the mine life of Peak will extend to 2012 at current processing rates.

EXPLORATION

To minimize exploration risk to shareholders in the quest for new gold mining opportunities, Goldcorp has established joint ventures with the following mining and exploration companies: 

• Rubicon Minerals Corp. (RMX - TSX)
• Planet Exploration Inc. (PXI - TSX Venture Exchange)
• Candente Resources Corp. (DNT - TSX Venture Exchange)
• Eastmain Resources Inc. (ER - TSX) 
• MetalCORP Limited (MTC- TSX Venture Exchange) 
• Pele Mountain Resources (GEM - TSX Venture Exchange)
• Kings Minerals NL  (KMN – ASX, Australia)
• Mauricio Hochschild S.A. de C.V.  (Privately Owned)
• Placer Dome (PDG – TSX)
• Orko Gold Corp. (OK – TSX Venture Exchange)
• Starcore Resources (SAM – TSX Venture Exchange)
• Grandcru Resources Corporation (GR – TSX Venture Exchange)
• Canasil Resources Inc. (CLZ – TSX Venture Exchange)
• Chesapeake Gold Corp.  (CKG – TSX Venture Exchange)

Recent News: Goldcorp Inc. Announces First Gold Pour at Amapari Site in Brazil

Goldcorp Inc. has to announced that the first gold was poured at their Amapari mining site in Brazil on Friday, September 23, 2005.

The pour of 10 kilos occurred 20 months after Goldcorp acquired the property in January 2004.  The mine will complete commissioning over the next few months and is expected to reach commercial production in the 4^th quarter.

The mine is scheduled to produce over 180,000 ounces of gold in 2006 at a cash cost of $160 per ounce. The project contains 1.53 million ounces of gold in proven and probable reserves and 1.3 million ounces in resources. The company believes that there is significant exploration potential on the site. 

Fundamental Considerations: The Ultimate Gold Stock –  in the company’s own words

Technical Considerations