How To Know If Goldcorp Is A Successful Company

Transcription

1 Second Quarter Conference Call July 30 th, 2009

2 Management Participants Chuck Jeannes President and Chief Executive Officer Lindsay Hall Chief Financial Officer Steve Reid Chief Operating Officer Jeff Wilhoit Vice President, Investor Relations 2

3 Forward Looking Statements This presentation contains forward-looking statements, within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of Goldcorp Inc. ( Goldcorp ). Forward-looking statements include, but are not limited to, statements with respect to the future price of gold, silver, copper, lead and zinc, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, hedging practices, currency exchange rate fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, timing and possible outcome of pending litigation, title disputes or claims and limitations on insurance coverage. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as plans, expects or does not expect, is expected, budget, scheduled, estimates, forecasts, intends, anticipates or does not anticipate, believes or variations of such words and phrases or statements that certain actions, events or results may, could, would, might or will be taken, occur or be achieved. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Goldcorp to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the integration of acquisitions; risks related to international operations; risks related to joint venture operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold, silver, copper, lead and zinc; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes; delays in obtaining governmental approvals or financing or in the completion of development or construction activities and other risks of the mining industry, as well as those factors discussed in the section entitled Description of the Business Risk Factors in Goldcorp s annual information form for the year ended December 31, 2007 available at Although Goldcorp has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Goldcorp does not undertake to update any forward-looking statements that are included in this document, except in accordance with applicable securities laws. 3

4 Second Quarter Highlights Gold production increases to 582,400 Cash costs remain lowest among peers Operating cash flow increases 22% Mechanical completion achieved at Peñasquito project Additional $88 million investment in growth projects 4 Lowest cost, highest margin senior gold producer

5 Growth Pipeline 3.5 Moz 2.3 Moz Red Lake Pueblo Viejo Musselwhite 2008 Cochenour Bruce Channel Peñasquito Éléonore Red Lake Open Pit Cerro Blanco Hollinger Peñasquito Underground Growth 5 year drivers plan: + already 50% growth in production in gold or production construction

6 Reaffirming 2009 Production Guidance 2009 Guidance 1 Gold production (M oz) 2.3 Cash Costs $/oz by-product co-product Capital expenditures $365 $400 $1.5B Exploration expenditures $109M Corporate administration $74M Depreciation / oz $ guidance assumes Au=$750/oz, Ag= $10/oz, Cu=$1.75/lb, CAD = 1.20 and MXN = 12.50, Oil = $65/bbl

7 Operations Review Steve Reid Chief Operating Officer 7

8 Red Lake A Year of Development Latest update Management transition Material hoisting at #3 shaft Ventilation system Mine dewatering system HGZ exploration drift Red Lake optimization studies On schedule Completed 8 Improving the world s richest gold mine

9 9 Red Lake 4199 Drift & Drilling Isometric View

10 10 Advancing the Cochenour Project

11 11 Higher Grades from Musselwhite

12 Peñasquito Project Execution Fully permitted and financed Commencement of oxide production Open pit pre-stripping commenced Primary crusher installed Grinding mills installed Mechanical completion mid 2009 First concentrate shipment Q Commercial production Jan On schedule Completed 12

13 Peñasquito Mechanical Completion The First Sulphide Process Circuit (Line 1) Primary crusher commissioned Feeders and conveying systems complete Stockpile of 230,000 tonnes for initial milling SAG mill and ball mills complete; commissioning underway Lead and zinc flotation circuits at completion 13 Line 1 Completed on Schedule

14 14 Peñasquito Construction

15 Peñasquito Open Pit Mining 15 July 2009

16 16 Peñasquito Grinding Circuit

17 Peñasquito Flotation Cells 17 July 2009

18 Peñasquito Cyclones 18 July 2009

19 Financial Highlights Lindsay Hall Chief Financial Officer 19

20 Q2 Financial Highlights ($millions, except per share amounts) Q Q Gross Margin $325 $366 Depreciation and depletion $128 $126 Mine operating earnings $197 $240 Net earnings ($232) $291 Adjusted net earnings (1) $99 $169 Operating Cash Flow before Noncash Working Capital Changes (2) $277 $275 Basic EPS ($0.32) $0.40 Adjusted EPS $0.14 $0.23 CFPS $0.36 $

21 Q Operational Highlights Q Q Gold Production (oz) 582, ,500 Gold Sales (oz) 564, ,900 Cash Costs (by-product) per ounce (3) $310 $288 Cash Costs (co-product) per ounce (3) $402 $353 Realized gold price per oz $927 $912 Margin per oz (by-product) $617 $624 Gross Margin ($ million) $325 $366 Total silver sold (million oz) Realized silver price per oz $7.81 $7.54 Total copper sold (million lbs) Realized copper price per lb $2.73 $ ** 2009 Flex Budget adjusts for metal prices changes:

22 Footnote(a) 1. Adjusted net earnings is a non-gaap measure. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, the Company and certain investors use this information to evaluate the Company s performance. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Refer to page 36 of the second quarter 2009 MD&A for a reconciliation of adjusted net earnings to reported net earnings. 2. Operating cash flow before working capital adjustments is a non-gaap measure which the Company believes provides a better indicator of the Company's ability to generate cash flow from its mining operations. Cash provided by operating activities reported in accordance with GAAP was $264 million in the second quarter of The Company has included a non-gaap performance measure, total cash cost per gold ounce, throughout this document. The Company reports total cash costs on a sales basis. In the gold mining industry, this is a common performance measure but does not have any standardized meaning, and is a non-gaap measure. The Company follows the recommendations of the Gold Institute standard. The Company believes that, in addition to conventional measures, prepared in accordance with GAAP, certain investors use this information to evaluate the Company s performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Refer to page 34 of the second quarter 2009 MD&A for a calculation of total cash cost per gold ounce. 22

23 Footnote(b) 4. The Company has included a non-gaap performance measure, margin per gold ounce, throughout this document. The Company reports margin on a sale basis. The Company believes that, in addition to conventional measures, prepared in accordance with GAAP, certain investors use this information to evaluate the Company s performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Margin per gold ounce is calculated as follows: Q Q Revenues per financial statements (millions) $ 629 $ 625 Treatment and refining charges on concentrate sales 7 6 By-product silver and copper sales and other (112) (78) Gold revenues (millions) $ 524 $ 553 Divided by ounces of gold sold (1) 564, ,300 Realized gold price per ounce $ 927 $ 912 Deduct total cash costs per ounce of gold (2) (310) (288) Margin per gold ounce $ 617 $ 624 (1) San Martin mine ended its mining process in October 2007 and is excluded from the results. (2) Refer to footnote 3. 23

24 Q & A

25 IN SUMMARY The Goldcorp Advantage Low Costs Growth Leader Low Political Risk Outstanding Balance Sheet No Gold Hedging 25 The best-positioned senior gold producer