Goldcorp First Quarter Net Earnings Increase 32 Percent
(All figures are in US dollars unless stated otherwise)
Goldcorp Inc. (TSX: G)(NYSE: GG) today reported net earnings of $124.9 million, or $0.18 per share, for the quarter ended March 31, 2007. This compares to net earnings of $92.4 million, or $0.27 per share, in the first quarter of 2006.
First Quarter 2007 Highlights
– Gold production nearly doubled to 558,000 ounces.
– Total cash costs (net of by-product copper and silver credits) of $181 per ounce of gold(1).
– Operating cash flows increased to $122.6 million.
– Cash and cash equivalents at March 31, 2007 of $403.5 million.
– Dividends paid of $31.6 million.
– Second quarter completion of the sale of Amapari and Peak mines for $200 million in cash and $100 million in Peak Gold common shares.
– Sale to Silver Wheaton of 25% of future Penasquito silver production for $485 million in cash expected to close by May 31.
“Solid mine performance in the first quarter has laid the groundwork for a good year,” said Kevin McArthur, Goldcorp President and Chief Executive Officer. “Our cornerstone Red Lake mine in Canada is off to a strong start, and production at Marlin mine in Guatemala continues to gain momentum. Another cornerstone asset, the Penasquito project in Mexico, remains on track. Construction activity is underway, good progress is being made on the engineering design and procurement and significant effort is now turning to further optimization studies in light of recent exploration success.
“Company wide gold production is scheduled to ramp up throughout the year, which includes the anticipated first gold pour at Los Filos mine late in the second quarter. Considering the revised production schedule for Los Filos mine, and the sale of the Amapari and Peak mines, we expect to produce approximately 2.5 million gold ounces for the year, and we continue to expect our total cash cost to be approximately $150 per gold ounce. Goldcorp enjoys the highest margins within the senior companies, attributable to our focus on designing and building low cost mines and our policy to not hedge our gold production.
“We also took important steps to further strengthen our financial position during the first quarter. The now-completed sale of the Peak and Amapari mines simplifies our asset portfolio. The second quarter sale of 25 percent of the future silver stream at Penasquito for $485 million provides flexibility to reduce debt and fund our growth programs. The two transactions bring a total of $785 million in cash and securities to our balance sheet in the second quarter. Our focus for the balance of 2007 will be to unlock value through an exploration investment of $120 million in our own properties and mine sites.”
A conference call will be held Friday, May 11th at 9:00am. (PT) to discuss these results. Participants may join the call by dialing toll free 1-888-819-9193 or (913) 981-4911 for calls from outside Canada and the US. Conference ID# 9234904.
The conference call will be recorded and available for replay until June 15th, 2007 by dialing 1-888-203-1112 or (719) 457-0820 for calls outside Canada and the US. Passcode: 9234904. A live and archived audio webcast will be available on the website at www.goldcorp.com.
Goldcorp is one of the world’s lowest-cost and fastest growing multi-million ounce gold producers with operations throughout the Americas. The Company does not hedge its gold production.
(1) 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.
Cautionary Note Regarding Forward-Looking Statements
This press release 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. 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”, or “believes”, or variations of such words and phrases or state 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 and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, 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, 2006, available on www.sedar.com, and Form 40-F for the year ended December 31, 2006 on file with the United States Securities and Exchange Commission in Washington, D.C. 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 incorporated by reference herein, except in accordance with applicable securities laws.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2007
(in United States dollars, tabular amounts in millions, except where noted)
This Management’s Discussion and Analysis should be read in conjunction with Goldcorp’s unaudited interim consolidated financial statements for the quarter ended March 31, 2007 and related notes thereto which have been prepared in accordance with Canadian generally accepted accounting principles. This Management’s Discussion and Analysis contains “forward-looking statements” that are subject to risk factors set out in a cautionary note contained herein. All figures are in United States dollars unless otherwise noted. This Management’s Discussion and Analysis has been prepared as of May 10, 2007.
FIRST QUARTER HIGHLIGHTS
– Net earnings of $124.9 million ($0.18 per share), compared to $92.4 million ($0.27 per share) in 2006. Adjusted net earnings (1) amounted to $82.8 million ($0.12 per share) for the quarter.
– Operating cash flows increased substantially to $122.6 million, compared to $74.4 million in 2006. Operating cash flows before working capital changes increased to $187.8 million compared to $140.8 million in 2006.
– Gold production nearly doubled to 558,000 ounces (2006 – 295,100 ounces).
– Gold sales increased to 531,300 ounces, compared with 288,400 ounces in 2006.
– Total cash costs of $181 per ounce (net of by-product copper and silver credits) (2006 – minus $88 per ounce). Total cash cost on a co-product basis of $291 per ounce (2006 – $200 per ounce).(2)
– During April 2007, Goldcorp completed its transaction to sell the Amapari and Peak mines to Peak Gold Ltd. in exchange for $200 million in cash and $100 million in share consideration. Goldcorp owns approximately 22% of Peak Gold Ltd. on the close of the transaction.
– On April 16, 2007, the Company agreed to sell 25% of the silver production from its Penasquito project located in Mexico to Silver Wheaton, for $485 million in cash and a per ounce cash payment of $3.90 per ounce, subject to an inflationary adjustment.
– Dividends paid of $31.6 million for the quarter.
– Cash and cash equivalents at March 31, 2007 totaled $403.5 million (December 31, 2006 – $555.2 million).
(1) Adjusted net earnings are reported net earnings less foreign exchange gain on revaluation of future income tax liabilities of $53.3 million and adding back the unrealized non-hedge derivative after tax loss of $8.6 million and unrealized loss on marketable securities of $2.6 million. 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.
(2) 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, the Company and 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.
OVERVIEW
Goldcorp is a leading gold producer engaged in gold mining and related activities including exploration, extraction, processing and reclamation. The Company’s assets are comprised of the Red Lake, Porcupine (51% interest) and Musselwhite (68% interest) gold mines in Canada, the Alumbrera gold/copper mine (37.5% interest) in Argentina, the El Sauzal gold mine and Luismin gold/silver mines in Mexico, the Marlin gold/silver mine in Guatemala, the San Martin gold mine in Honduras, the La Coipa gold/silver mine (50% interest) in Chile, the Marigold gold mine (67% interest) and Wharf gold mine in the United States. Significant development projects include the expansion of the existing Red Lake mine, the Penasquito gold/silver/zinc project and Los Filos gold project in Mexico, the Eleonore gold project in Canada, the Cerro Blanco gold project in Guatemala and the Pueblo Viejo gold project (40% interest) in the Dominican Republic. Goldcorp also owns a 49% interest in Silver Wheaton Corp. (“Silver Wheaton”), a publicly traded silver mining company, and 77% interest in Terrane Metals Corp. (“Terrane”), a publicly traded exploration company. The Peak gold mine in Australia and the Amapari gold mine in Brazil are disclosed as assets held for sale as at March 31, 2007 due to the sale in April 2007.
Goldcorp is listed on the New York Stock Exchange (symbol: GG) and the Toronto Stock Exchange (symbol: G). In addition, the Company has share purchase warrants which trade on the New York Stock Exchange and Toronto Stock Exchange.
Goldcorp’s strategy is to provide its shareholders with superior returns from high quality assets. Goldcorp has a strong and liquid balance sheet, and has not hedged or sold forward any of its future gold production.
Goldcorp is one of the world’s lowest cost and fastest growing senior gold producer with operations throughout the Americas.
CORPORATE DEVELOPMENTS
Sale of Peak Mine and Amapari Mine
During April 2007, Goldcorp closed its transaction to sell the Amapari mine in Brazil and Peak mines to GPJ Ventures Ltd. (name subsequently changed to Peak Gold Ltd.) in exchange for $200 million in cash and $100 million in share consideration, which will result in a gain of approximately $41 million pre-tax, to be recorded in the second quarter of 2007. Goldcorp owns approximately 22% of Peak Gold Ltd. on close of the transaction.
Sale of Penasquito Silver Stream
On April 16, 2007, Goldcorp agreed to sell to Silver Wheaton 25% of the silver produced from its Penasquito project located in Mexico for the life of mine. Total upfront consideration to be paid is $485 million in cash. In addition, a per ounce cash payment of the lesser of $3.90 and the prevailing market price is due (subject to an inflationary adjustment).
At July 31, 2006, Penasquito had 10 million ounces of proven and probable gold reserves, 2 million ounces of measured and indicated gold resources, 14 million ounces of inferred gold resources, 575 million ounces of proven and probable silver reserves, measured and indicated silver resources of 247 million ounces and inferred silver resources of 881 million ounces. Goldcorp is continuing exploration on the project and expects to provide an updated reserve and resource statement in the second quarter of 2007.
As a result of this transaction, Silver Wheaton will retain a right of first refusal on any further sales of silver streams from Penasquito for the mine life for so long as Goldcorp maintains at least a 20% interest in Silver Wheaton. Goldcorp’s right to maintain its pro-rata interest in Silver Wheaton has been extended to December 31, 2009. In addition, Silver Wheaton also entered into a commitment with the Bank of Nova Scotia and BMO Capital Markets, as co-lead arrangers and administrative agents, to borrow $185 million under a non revolving term loan (the “Term Loan”) and $300 million under a revolving term loan (the “Revolving Loan”) in order to finance the acquisition of the Penasquito silver contract.
Closing of this transaction is subject to execution of definitive agreements and receipt of all regulatory approvals and third party consents, including acceptance by the Toronto Stock Exchange. This transaction is expected to close by May 31, 2007.
Acquisition of Glamis Gold Ltd.
On August 31, 2006, Goldcorp and Glamis Gold Ltd. (“Glamis”) entered into an agreement to combine the two companies. On October 26, 2006, the Glamis shareholders overwhelmingly approved the transaction under the plan of arrangement and the transaction closed on November 4, 2006.
Upon closure of the acquisition, Goldcorp acquired interests in the El Sauzal mine (100%) in Mexico, Marlin mine (100%) in Guatemala, Marigold mine (67%) in the United States, San Martin mine (100%) in Honduras, the Penasquito project (100%) in Mexico, and the Cerro Blanco project (100%) in Guatemala.
Under the terms of the arrangement, each Glamis common share was exchanged for 1.69 Goldcorp common shares and C$0.0001 in cash. All outstanding Glamis stock appreciation rights (“SAR’s”) were exercised by the holders into Glamis shares such that holders of the SAR’s received Goldcorp shares and cash at the same share exchange ratio. Each Glamis stock option, which gave the holder the right to acquire shares in the common stock of Glamis when presented for execution, was exchanged for a stock option giving the holder the right to acquire shares in the common stock of Goldcorp on the same basis as the exchange of Glamis common shares for Goldcorp common shares.
This business combination has been accounted for as a purchase transaction, with Goldcorp being identified as the acquirer and Glamis as the acquiree. The results of operations of the acquired assets are included in the consolidated financial statements of Goldcorp from the date of acquisition, November 4, 2006.
The purchase consideration has been allocated on a preliminary basis to the fair value of assets acquired and liabilities assumed, with goodwill assigned to a specific reporting unit, based on management’s best estimates and taking into account all available information at the time these consolidated financial statements were prepared. Goldcorp will continue to review information and perform further analysis with respect to each of the Glamis assets, including an independent valuation, prior to finalizing the allocation of the purchase price. This process will be performed in accordance with the recent accounting pronouncement relating to “Mining Assets – Impairment and Business Combination” (Emerging Issues Committee Abstract 152). Although the final results of this review are presently unknown, it is anticipated that it may result in a change to the amount assigned to goodwill and a change to the value attributable to tangible assets and future income tax liabilities.
SUMMARIZED FINANCIAL RESULTS (US dollars in millions, except where noted) Three Months Ended March 31 December 31 2007 2006 2006 2005 ——————————————- (note 1) Revenues $ 505.6 $ 286.3 $ 513.3 $ 268.3 Gold produced (ounces) 558,000 295,100 587,900 296,200 Gold sold (ounces) 531,300 288,400 559,400 307,300 Average realized gold price (per ounce) $ 650 $ 560 $ 620 $ 492 Average London spot gold price (per ounce) $ 650 $ 554 $ 604 $ 484 Earnings (loss) from operations $ 140.5 $ 140.6 $ (48.6) $ 112.8 Net earnings $ 124.9 $ 92.4 $ 66.0 $ 101.7 Earnings per share Basic $ 0.18 $ 0.27 $ 0.11 $ 0.30 Diluted $ 0.18 $ 0.24 $ 0.11 $ 0.27 Cash flow from operating activities $ 122.6 $ 74.4 $ 255.5 $ 136.9 Total cash costs (per gold ounce) (note 2) $ 181 $ (88) $ 160 $ (73) Dividends paid $ 31.6 $ 15.3 $ 27.5 $ 15.3 Cash and cash equivalents $ 403.5 $ 169.6 $ 555.2 $ 562.2 Total assets $ 17,894.4 $ 5,054.9 $ 17,965.9 $ 4,066.0 Three Months Ended September 30 June 30 2006 2005 2006 2005 ——————————————- (note 1) Revenues $ 418.9 $ 203.7 $ 491.5 $ 301.6 Gold produced (ounces) 431,800 283,700 378,500 281,000 Gold sold (ounces) 421,400 276,700 398,700 543,100 Average realized gold price (per ounce) $ 620 $ 444 $ 620 $ 432 Average London spot gold price (per ounce) $ 622 $ 440 $ 627 $ 427 Earnings (loss) from operations $ 143.9 $ 83.9 $ 219.5 $ 160.3 Net earnings $ 59.5 $ 56.5 $ 190.4 $ 98.0 Earnings per share Basic $ 0.14 $ 0.17 $ 0.50 $ 0.30 Diluted $ 0.14 $ 0.15 $ 0.49 $ 0.28 Cash flow from operating activities $ 221.3 $ 84.8 $ 240.1 $ 163.9 Total cash costs (per gold ounce) (note 2) $ 84 $ 9 $ (123) $ 52 Dividends paid $ 18.8 $ 15.2 $ 17.4 $ 15.2 Cash and cash equivalents $ 342.3 $ 420.9 $ 264.6 $ 420.8 Total assets $ 7,084.5 $ 3,839.2 $ 6,969.5 $ 3,756.0 (1) Includes Goldcorp’s share of results of Campbell, Musselwhite (68%), Porcupine (51%) and La Coipa (50%) from May 12, 2006, the date of acquisition. Also includes Goldcorp’s share of results of El Sauzal, Marlin, San Martin and Marigold (67%) from November 4, 2006, the date of acquisition. (2) The calculation of total cash costs per ounce of gold is net of by-product sales revenue (by-product copper revenue for Peak and Alumbrera; by-product silver revenue for La Coipa and Marlin at market silver prices; and by-product silver revenue for Luismin of $3.90 per silver ounce sold to Silver Wheaton).
Review of Financial Results
Substantial increases in revenue, gold production and sales, earnings, cash flows and total assets, as compared to the first quarter of 2006, are primarily the result of the acquisitions of the Glamis and Placer assets in 2006. Net earnings in the first quarter of 2007 were impacted by higher depreciation and depletion expense due to the fair valuation of these assets, interest expense of $13.8 million incurred on bank debt to finance the Company’s acquisitions, and a non-cash derivative loss from copper forward contracts of $8.3 million, offset by a $53.3 million unrealized foreign exchange gain arising from the revaluation of future income tax liabilities. Total cash costs per ounce of $181 in the first quarter of 2007, as compared to minus $88 in the first quarter of 2006, increased significantly due to a decline in copper prices, an inclusion of the net proceeds payments to Yacimientos Mineros de Agua de Dionisio (“YMAD”) at Alumbrera and the addition of Placer and Glamis mines. The YMAD payment recorded in the first quarter was $35 million (Goldcorp’s share). This significant payment translates into an increase in cash costs of $66 per ounce to Goldcorp’s consolidated cash costs. The 2006 fourth quarter loss from operations is due to the write down of the Amapari mine of $175 million.
RESULTS OF OPERATIONS
Three months ended March 31
Aver- age real- Earn- Total ized ings cash Gold gold (loss) costs prod- Gold price from (3) Reve- uced sold (per Opera- (per nues (ounces) (ounces) ounce) tions ounce) ————————————————————————– Red Lake(1) 2007 $ 105.9 179,400 162,100 $ 652 $ 48.5 $ 228 ———————————————————– 2006 67.4 121,300 120,700 557 44.4 130 ———————————————————– Musselwhite(2) 2007 23.2 36,200 35,700 648 2.2 458 ———————————————————– 2006 – – – – – – ———————————————————– Porcupine(2) 2007 19.8 36,800 30,400 649 1.3 419 ———————————————————– 2006 – – – – – – ———————————————————– Luismin(4) 2007 37.8 45,900 46,500 650 9.4 141 ———————————————————– 2006 34.2 47,800 46,500 554 9.0 117 ———————————————————– El Sauzal(3) 2007 44.1 66,600 66,500 655 11.7 117 ———————————————————– 2006 – – – – – – ———————————————————– Alumbrera(4) 2007 104.3 43,200 40,000 652 22.1 (299) ———————————————————– 2006 125.0 62,300 51,500 577 78.4 (1,310) ———————————————————– Marlin(3,4) 2007 41.6 46,800 51,100 653 16.4 144 ———————————————————– 2006 – – – – – – ———————————————————– La Coipa(2,4) 2007 31.4 5,100 4,300 654 15.1 (4,235) ———————————————————– 2006 – – – – – – ———————————————————– Marigold(3) 2007 9.5 14,300 14,700 647 (1.0) 549 ———————————————————– 2006 – – – – – – ———————————————————– Wharf 2007 10.7 14,000 15,700 653 4.0 330 ———————————————————– 2006 7.3 9,900 11,800 559 1.9 315 ———————————————————– San Martin(3) 2007 7.5 11,400 11,400 657 1.6 453 ———————————————————– 2006 – – – – – – ———————————————————– Silver Wheaton 2007 44.1 – – – 21.7 – ———————————————————– 2006 25.7 – – – 11.3 – ———————————————————– Peak(4) 2007 14.7 31,200 24,800 652 7.1 311 ———————————————————– 2006 22.6 33,400 35,300 558 7.1 192 ———————————————————– Amapari 2007 18.3 27,100 28,100 653 3.3 455 ———————————————————– 2006 12.6 20,400 22,600 556 (3.0) 464 ———————————————————– Terrane 2007 – – – – (1.5) – ———————————————————– 2006 – – – – – – ———————————————————– Other 2007 (7.2) – – – (21.4) – ———————————————————– 2006 (8.5) – – – (8.5) – ———————————————————– Total 2007 505.6 558,000 531,300 650 140.5 181 ———————————————————– 2006 286.3 295,100 288,400 560 140.6 (88) ———————————————————– (1) Red Lake operating results include those of the Campbell mine from May 12, 2006, the date of acquisition. Therefore, the comparative quarter from 2006 represents the Red Lake Complex prior to the acquisition date. The inclusion of higher costs from the Campbell complex in 2007 is the primary reason for increased cash costs per ounce period over period from prior year. The combined mines are presented as one mine going forward. (2) Placer mine operating results are included from May 12, 2006, the date of acquisition. (3) Glamis operating results are included from November 4, 2006, the date of acquisition. (4) The calculation of total cash costs per ounce of gold is net of by-product sales revenue (by-product copper revenue for Peak and Alumbrera; by-product silver revenue for La Coipa and Marlin at market silver prices; and by-product silver revenue for Luismin of $3.90 per silver ounce sold to Silver Wheaton).
OPERATIONAL REVIEW
Red Lake gold mines, Canada (1) Three Months Ended Operating March 31 December 31 September 30 June 30 March 31 Data 2007 2006 2006 2006 2006 ————————————————————————— Tonnes of ore milled 180,900 208,300 184,000 191,900 184,700 Average mill head grade (grams/tonne) 32 27 28 29 29 Average recovery rate 97% 96% 96% 97% 97% Gold (ounces) – Produced 179,400 171,500 156,400 167,600 170,100 – Sold 162,100 154,400 165,500 172,400 168,900 Average realized gold price (per ounce) $ 652 $ 618 $ 621 $ 625 $ 560 Total cash costs (per ounce) $ 228 $ 239 $ 214 $ 183 $ 181 Financial Data ————————————————————————— Revenues $ 105.9 $ 96.0 $ 103.6 $ 107.8 $ 94.6 Earnings from operations $ 48.5 $ 39.0 $ 49.3 $ 52.1 $ 36.7 (1) Campbell complex operations are included in Goldcorp’s operating results for the period subsequent to May 12, 2006, the date of acquisition. Prior period combined data is shown for comparative purposes only and may not include all pro forma financial adjustments required had the acquisition in fact taken place on January 1, 2006.
The Red Lake gold mines produced 179,400 ounces of gold, compared with 170,100 ounces for the corresponding period last year. The increased production relates to higher ore grades. The average mill feed grade was 32 grams/tonne compared to 29 grams/tonne in 2006, with recoveries steady at 97%.
The sinking of the #3 shaft reached its final depth of 1,924 meters on January 9, 2007. Most of the temporary equipment required while sinking has been removed and preparations to have the service cage operational by early May are progressing. Half of the major components of the loading pocket have been installed. The expanded mill will be ready for operation in mid-2007 and the expansion project is on track for completion in late 2007.
Exploration continues to focus on the five key areas of upside for the mine;
1. The High Grade Zone at depth where new drilling accesses are being prepared
2. The Deep Campbell zone
3. The ‘Party Wall’ area, in the area previously hosting the boundary between the two mines
4. The Upper Red Lake sulphides where optimization work is identifying new mining areas, and
5. Surface drilling investigating open pit potential.
Musselwhite mine, Canada (Goldcorp’s interest – 68%) (1) Three Months Ended Operating March 31 December 31 September 30 June 30 March 31 Data 2007 2006 2006 2006 2006 ————————————————————————– Tonnes of ore milled 226,800 222,000 203,200 218,900 240,800 Average mill head grade (grams/tonne) 5.19 5.44 6.38 5.65 4.71 Average recovery rate (%) 96% 99% 95% 94% 91% Gold (ounces) – Produced 36,200 38,400 39,600 37,600 33,200 – Sold 35,700 38,800 38,200 37,800 33,900 Average realized gold price (per ounce) $ 648 $ 600 $ 636 $ 618 $ 553 Total cash costs (per ounce) $ 458 $ 470 $ 436 $ 375 $ 417 Financial Data ————————————————————————– Revenues $ 23.2 $ 23.1 $ 24.4 $ 23.4 $ 18.8 Earnings (loss) from operations $ 2.2 $ 0.3 $ 1.5 $ 4.5 $ (0.3) (1) Results from Musselwhite mine are only included in Goldcorp’s financial results for the period subsequent to the date of acquisition May 12, 2006. Prior period results are shown for comparative purposes only and may not include all pro forma financial adjustments required had the acquisition in fact taken place on January 1, 2006.
Gold production at Musselwhite was 36,200 ounces, a 9% increase over the corresponding quarter in 2006. In 2007, the head grade through the mill was 10% higher, offsetting the lower mill throughput. The comparative higher mill throughput in 2006 was attributable to the milling of surface stockpile, which was exhausted in the first quarter of 2006. Underground production increased 6% in the first quarter of 2007.
Cash costs per ounce of $458 were 10% higher in the quarter compared to $417 in 2006 due to higher cash operating costs. The cost increase was primarily incurred by the underground operations as a result of higher mobile equipment and tire costs.
Positive exploration results continue to be returned from the PQ Deeps. In the first quarter of 2007 an additional 50 meters of deposit strike length was drilled off to mineral reserve standard. A second underground rig has been mobilized and will also be drilling off reserves on the PQ Deeps and new targets in a shear zone / iron formation approximately 200 meters to the west of the PQ Deeps.
Drilling will continue to test two clearly identified targets that have been identified from results to date on the North Shore of Opapimiskan Lake 3 km north of existing reserves.
Porcupine mine, Canada (Goldcorp’s interest – 51%) (1) Three Months Ended Operating March 31 December 31 September 30 June 30 March 31 Data 2007 2006 2006 2006 2006 ————————————————————————– Tonnes of ore milled 491,100 549,400 538,400 554,700 508,500 Average mill head grade (grams/tonne) 2.49 2.73 2.71 2.57 2.17 Average recovery rate (%) 94% 95% 94% 90% 90% Gold (ounces) – Produced 36,800 45,700 44,300 41,300 31,400 – Sold 30,400 48,100 44,700 42,000 33,400 Average realized gold price (per ounce) $ 649 $ 617 $ 622 $ 616 $ 554 Total cash costs (per ounce) $ 419 $ 364 $ 337 $ 361 $ 434 Financial Data ————————————————————————– Revenues $ 19.8 $ 29.7 $ 27.9 $ 26.0 $ 18.5 Earnings (loss) from operations $ 1.3 $ 6.6 $ 6.9 $ 4.4 $ (0.8) (1) Results from Porcupine mine are only included in Goldcorp’s financial results for the period subsequent to the date of acquisition May 12, 2006. Prior period results are shown for comparative purposes only and may not include all pro forma financial adjustments required had the acquisition in fact taken place 0n January 1, 2006.
Gold production for the first quarter was 36,800 ounces, an increase of 17% as compared to the first quarter in 2006, due primarily to increased grade and recoveries from the underground operations. Compared to the fourth quarter of 2006, however, production fell by 20% as stockpiled lower grade material made up the ore feed, while overburden stripping proceeded in stage 2 ore of the Pamour open pit, where access to ore zones is expected during the second half of 2007.
Gold production in the quarter was also negatively impacted by lower than planned mill throughput due to a severe freeze-thaw cycle throughout the winter. The underground operations at Hoyle Pond and Dome both produced at grades and mill recoveries above plan which partially offset some of the production shortfalls from the Pamour open pit. First quarter 2007 cash costs per ounce increased 15% over the fourth quarter of 2006 due to lower production and a higher cost of sales associated with stripping.
New resources at the Pamour North Contact immediately north of the existing open pit are being followed up to determine their open pit potential. Exploration drilling continues on the Hollinger project with five surface diamond drills operating in order to reach a decision on its mining potential by year-end. Mineral Resources on the Hollinger property were recently reported at;
Indicated: 40.3 million tonnes grading 1.65 grams/tonne containing 2.14 million ounces of gold and
Inferred: 44.2 million tonnes grading 1.57 grams/tonne containing 2.24 million ounces of gold (100% basis).
Luismin mines, Mexico Three Months Ended Operating March 31 December 31 September 30 June 30 March 31 Data 2007 2006 2006 2006 2006 ————————————————————————— Tonnes of ore milled 232,400 285,800 276,700 267,400 255,800 Average mill head grade (grams/tonne) – Gold 6.46 6.08 6.50 6.61 6.18 – Silver 326 296 316 358 348 Average recovery rate (%) – Gold 95% 94% 94% 94% 94% – Silver 92% 89% 89% 89% 87% Produced (ounces) – Gold 45,900 52,600 54,400 53,600 47,800 – Silver 1,898,300 2,118,200 2,233,200 2,388,400 2,191,900 Sold (ounces) – Gold 46,500 52,200 53,400 54,900 46,500 – Silver 1,937,000 2,146,200 2,213,500 2,442,500 2,171,000 Average realized price (per ounce) – Gold $ 650 $ 615 $ 618 $ 629 $ 554 – Silver (1) $ 3.90 $ 3.90 $ 3.90 $ 3.90 $ 3.90 Total cash costs per gold ounce (1) $ 141 $ 167 $ 132 $ 109 $ 117 Financial Data ————————————————————————— Revenues $ 37.8 $ 39.8 $ 41.5 $ 44.1 $ 34.2 Earnings from operations $ 9.4 $ 5.0 $ 10.5 $ 13.3 $ 9.0 (1) Luismin silver is sold to Silver Wheaton at a price of $3.90 per ounce. The calculation of total cash costs per ounce of gold is net of by-product silver sales revenue of $3.90 per silver ounce (If the silver sales were treated as a co-product, average total cash costs at Luismin for the quarter ended March 31, 2007, would be $240 per ounce of gold and $1.54 per ounce of silver (March 31, 2006 – $223 and $1.65 respectively).
On January 31, 2007, Luismin sold its San Martin operations for proceeds of $26 million, comprising of $24 million in cash and $2 million in shares of Starcore International Ventures Ltd. San Martin was a smaller mine processing approximately 250,000 tonnes per annum providing about 20,000 ounces of gold and 200,000 ounces of silver per year. As a result of the sale, the mill throughput was 9% lower in 2007 compared to the fourth quarter of 2006 mainly due to the foregone operations. However, gold production of 45,900 ounces during the quarter only marginally declined from the fourth quarter, as a result of a higher gold grades. Lower silver grades, partially offset by higher recoveries in 2007, have contributed to a 13% decline of the silver ounces produced compared to the same period in 2006. Cash costs per ounce of $141 in 2007 have increased 20% over cash costs per ounce of $117 for the same period in 2006, due primarily to higher silver by-product sales in 2006.
With respect to capital projects, at San Dimas, construction of a new filtering process for the tailings is in progress and will be completed in the second quarter of 2007, installation of the new mill is complete and going through its testing period, and the Las Truchas power generation expansion project is on schedule and is 38% complete.
At San Dimas, exploration has been successful in the Central Block area, with very good results, especially in the Nancy East vein. During the first quarter, exploration continued in the Nukay underground also with very good results, proving the extension of several mineralized ore bodies over 200 meters below the current levels of development. The Nukay Mine also received the clean industry certification that accredits the operations as being in total compliance with environmental regulations.
El Sauzal mine, Mexico (1) Three Months Ended Operating March 31 December 31 September 30 June 30 March 31 Data 2007 2006 2006 2006 2006 ————————————————————————— Tonnes of ore mined 594,800 637,500 610,800 706,800 678,500 Tonnes of waste removed 985,100 1,163,300 1,270,300 1,250,500 1,073,700 Ratio of waste to ore 1.7 1.8 2.1 1.8 1.6 Tonnes of ore milled 480,200 515,000 510,200 556,400 526,100 Average mill head grade (grams/tonne) 4.64 5.46 5.01 4.49 3.86 Average recovery rate 94% 94% 94% 94% 93% Gold (ounces) – Produced 66,600 84,800 77,100 75,400 62,300 – Sold 66,500 82,000 77,000 75,800 62,000 Average realized gold price (per ounce) $ 655 $ 625 $ 612 $ 624 $ 556 Total cash costs (per ounce) $ 117 $ 94 $ 108 $ 100 $ 114 Financial Data ————————————————————————— Revenues $ 44.1 $ 52.2 $ 47.1 $ 47.9 $ 34.8 Earnings from operations $ 11.7 $ 36.9 $ 30.7 $ 31.8 $ 20.0 (1) Results from El Sauzal mine are only included in Goldcorp’s financial results for the period subsequent to the date of acquisition November 4, 2006. Prior period results are shown for comparative purposes only and may not include all pro forma financial adjustments required had the acquisition in fact taken place on January 1, 2006.
The El Sauzal Mine produced 66,600 ounces of gold, compared with 62,300 ounces for the corresponding period last year, due to higher grade. Recoveries and cash costs were consistent with the same period last year. Production in the first quarter of 2007 declined by 20% over the fourth quarter of 2006, due to lower average mill grades and lower tonnes of ore milled.
Construction on the heap leach platform continued during the quarter with the project now 90% completed. French drains, rock drains under the tailings pile, are still being constructed in order to expand the leach pad footprint. The latest geological model indicates there will be large quantities of leach grade ore, requiring additional pad space.
The El Sauzal Mine received the clean industry certification that accredits the operations in total compliance with environmental regulations. Work commenced on proceeding towards international cyanide code certification.
Marlin mine, Guatemala (1) Three Months Ended Operating March 31 December 31 September 30 June 30 March 31 Data 2007 2006 2006 2006 2006 ————————————————————————— Tonnes of ore milled 361,500 383,100 271,900 220,800 213,000 Average mill head grade (grams/tonne) – Gold 4.87 5.13 4.02 4.19 6.44 – Silver 89 85 63 66 82 Average recovery rate (%) – Gold 83% 87% 89% 85% 88% – Silver 58% 60% 69% 58% 58% Produced (ounces) – Gold 46,800 55,100 33,700 28,900 43,300 – Silver 591,900 622,100 382,000 273,300 321,000 Sold (ounces) – Gold 51,100 50,000 32,000 34,800 37,000 – Silver 616,400 558,000 335,000 310,000 240,000 Average realized gold price (per ounce) $ 653 $ 621 $ 597 $ 625 $ 560 Total cash costs (per ounce) (2) $ 144 $ 137 $ 268 $ 258 $ 208 Financial Data ————————————————————————— Revenues $ 41.6 $ 38.2 $ 23.1 $ 25.5 $ 23.1 Earnings from operations $ 16.4 $ 17.5 $ 5.3 $ 6.1 $ 7.5 (1) Results from Marlin mine are only included in Goldcorp’s financial results for the period subsequent to the date of acquisition November 4, 2006. Prior period results are shown for comparative purposes only and may not include all pro forma financial adjustments required had the acquisition in fact taken place on January 1, 2006. (2) The calculation of total cash costs per ounce of gold sold is net of by-product silver sales revenue. If the silver sales were treated as a co-product, average total cash costs at Marlin for the quarter ended March 31, 2007, would be $246 per ounce of gold and $5 per ounce of silver (2006 – $245 and $4 respectively).
During the first quarter of 2007, the Marlin Mine produced 46,800 ounces of gold and 591,900 ounces of silver, compared with 43,300 ounces of gold and 321,000 ounces of silver produced in the first quarter of 2006. Cash costs in the first quarter of 2007 were $144 per ounce versus $208 per ounce for the first quarter of 2006 reflecting higher production and improved operations since start up.
Mill throughput in first quarter of 2007 averaged 4,000 tonnes per day compared with 2,400 tonnes per day in the first quarter of 2006, reflecting the improvements made in the processing operations. The first belt feeder in the ore reclaim tunnel was installed and commissioned in the quarter, significantly improving the feed rate to the SAG mill; a second feeder is being constructed and will be installed in the second quarter.
Gold recovery was lower than the recoveries for the same period last year, reflecting the higher throughput in the mill and the reduced residence time while the oxygen injection system was being installed in the leach circuit. The oxygen injection system was installed and commissioned late in the quarter and improvement in recoveries is expected in the next quarter. Construction of the foundations for the 7th leach tank and 2nd neutralization tank are proceeding as planned and contracts for procurement of materials and erection of the metal structures have been awarded. The addition of the 7th leach tank will increase ore retention time in the leach circuit and improve recoveries.
Underground ore production increased to 66,000 tonnes in the first quarter, compared with 44,200 tonnes per quarter average for the previous four quarters.
Alumbrera mine, Argentina (Goldcorp’s interest – 37.5%) Three Months Ended Operating March 31 December 31 September 30 June 30 March 31 Data 2007 2006 2006 2006 2006 ————————————————————————– Tonnes of ore mined 2,504,300 4,040,100 2,668,600 2,550,200 2,366,600 Tonnes of waste removed 8,488,500 6,982,400 8,029,900 7,363,600 8,059,500 Ratio of waste to ore 3.4 1.7 3.0 2.9 3.4 Tonnes of ore milled 3,648,800 3,449,400 3,400,500 3,472,600 3,308,600 Average mill head grade – Gold (grams/tonne) 0.54 0.53 0.76 0.78 0.76 – Copper (%) 0.49% 0.48% 0.54% 0.61% 0.63% Average recovery rate (%) – Gold 69% 75% 78% 79% 77% – Copper 82% 83% 89% 89% 89% Produced – Gold (ounces) 43,200 44,200 65,200 68,500 62,300 – Copper (thousands of pounds) 32,600 30,300 36,000 41,800 40,800 Sold – Gold (ounces) 40,000 54,000 58,200 74,000 51,500 – Copper (thousands of pounds) 30,000 31,200 33,100 46,700 33,500 Average realized price – Gold (per ounce) $ 652 $ 639 $ 628 $ 608 $ 577 – Copper (per pound) $ 2.93 $ 2.51 $ 3.70 $ 4.44 $ 3.25 Total cash costs (per gold ounce)(1) $ (299) $ (492) $ (1,074) $ (1,661) $ (1,310) Financial Data ————————————————————————– Revenues $ 104.3 $ 94.3 $ 143.8 $ 230.0 $ 125.0 Earnings from operations $ 22.1 $ 34.2 $ 78.1 $ 143.5 $ 78.4 (1) The calculation of total cash costs per ounce of gold for Alumbrera is net of by-product copper sales revenue. If copper production were treated as a co-product, average total cash costs at Alumbrera for the period ended March 31, 2007 would be $432 per ounce of gold and $2.01 per pound of copper (March 31, 2006 – $162 per ounce of gold and $1.04 per pound of copper).
Alumbrera’s gold production for the quarter declined from 62,300 ounces in 2006 to 43,200 ounces in 2007, due to lower average mill feed grades, in line with management expectations, and lower recoveries, as a result of processing high gypsum content ore. Copper production for the quarter also declined from 40.8 million pounds in 2006 to 32.6 million pounds in 2007 for the same reasons.
Total material mined was greater than plan by about 5% for the quarter due to shorter hauls from Phase 8 being mined due to tire shortages. Should tire shortages continue, mining rates could be impacted in the future. Total cash costs increased in the first quarter in 2007 to minus $299 per ounce of gold, net of by-product copper credits, compared to minus $1,310 per ounce during the same period last year as a result of a decline in copper prices, an inclusion of the net proceeds payments to Yacimientos Mineros de Agua de Dionisio (“YMAD”), which commenced in the second quarter of 2006. The payment is 20% of net proceeds, as defined in the YMAD agreement, which approximates EBITDA, less capital expenditures and working capital adjustments. Due to the joint venture distributions in the first quarter which impacted the working capital, a $35 million (Goldcorp’s share) royalty expense was recorded . This significant royalty translates into an increase in cash costs of $875 per ounce (by-product) at Alumbrera and an impact of $66 per ounce to Goldcorp’s consolidated cash costs.
The expansion of milling capacity to a 40 million tonne per annum (100%) was completed, resulting in record mill production rates in the first quarter of 2007.
La Coipa mine, Chile (Goldcorp’s interest – 50%) (1) Three Months Ended Operating March 31 December 31 September 30 June 30 March 31 Data 2007 2006 2006 2006 2006 ————————————————————————— Tonnes of ore milled 391,300 396,600 638,900 738,000 788,800 Average mill head grade (grams/tonne) – Gold 0.79 1.02 0.76 0.82 1.19 – Silver 282 273 74 54 58 Average recovery rate (%) – Gold 60% 67% 75% 83% 83% – Silver 74% 67% 57% 63% 52% Produced (ounces) – Gold 5,100 8,800 11,900 16,600 25,100 – Silver 2,502,100 2,326,400 866,700 814,900 769,500 Sold (ounces) – Gold 4,300 13,900 10,900 18,300 27,000 – Silver 2,136,100 2,176,600 654,900 762,500 751,700 Average realized price (per ounce) – Gold $ 654 $ 608 $ 628 $ 629 $ 558 – Silver $ 13.38 $ 12.59 $ 11.80 $ 12.34 $ 10.04 Total cash costs per gold ounce(2) $ (4,235) $ (794) $ 89 $ 44 $ 194 Financial Data ————————————————————————— Revenues $ 31.4 $ 35.6 $ 14.6 $ 21.0 $ 22.6 Earnings (loss) from operations $ 15.1 $ 12.2 $ (2.2) $ 4.3 $ 7.3 (1) Results from La Coipa mine are only included in Goldcorp’s financial results for the period subsequent to the date of acquisition May 12, 2006. Prior period results are shown for comparative purposes only and may not include all pro forma financial adjustments required had the acquisition in fact taken place on January 1, 2006. (2) The calculation of total cash costs per ounce of gold is net of by-product silver sales revenue. If gold production were treated as a co-product, average total cash costs for the year ended March 31, 2007 would be $212 per ounce of gold and $3.86 per ounce of silver (March 31, 2006 – $313 per ounce of gold and $5.70 per ounce of silver).
La Coipa mine produced 5,100 ounces of gold at a cash cost of minus $4,235 per ounce, compared with 25,100 ounces of gold for the same period in 2006 and a cash cost of $194. The silver production was 2,502,100 compared with 769,500 ounces in the year 2006. The higher silver production was mainly due to higher silver grade and higher recovery from the Puren mine. The Puren mine will be mined throughout 2007 and its production will be primarily silver. There were lower tonnes of ore milled because some areas of Puren with high silver grades were processed at a lower tonnage rate in order to increase residence time in the leaching plant and to maximize recovery. Gold recovery was lower than prior quarters mainly due to fine disseminate gold particle in the ore and an increase of other impurities in the Puren ore.
Higher earnings from operations compared to the first quarter 2006 are due to lower cost of sales from higher production and higher revenues as a result of higher silver sales and higher realized prices.
La Coipa is working on different metallurgical solutions for the sulphide ores located under the Ladera Farellon pit.
Marigold mine, United States (Goldcorp’s interest – 67%) (1) Three Months Ended Operating March 31 December 31 September 30 June 30 March 31 Data 2007 2006 2006 2006 2006 ————————————————————————— Tonnes of ore mined 969,200 1,850,900 1,364,400 1,490,400 1,073,200 Tonnes of waste removed 6,497,100 3,844,500 5,003,600 4,741,800 5,806,600 Ratio of waste to ore 6.7 2.1 3.7 3.2 5.4 Tonnes of ore processed 969,200 1,850,900 1,364,400 1,490,500 1,073,300 Average head grade (grams/tonne) 0.49 0.81 0.82 0.62 0.71 Average recovery rate (%) 70% 70% 70% 70% 70% Gold (ounces) – Produced 14,300 34,600 20,900 17,100 27,200 – Sold 14,700 34,700 20,400 17,100 26,000 Average realized gold price (per ounce) $ 647 $ 621 $ 620 $ 616 $ 555 Total cash costs (per ounce) $ 549 $ 315 $ 303 $ 316 $ 280 Financial Data ————————————————————————— Revenues $ 9.5 $ 21.6 $ 12.7 $ 10.5 $ 14.4 Earnings (loss) from operations $ (1.0) $ 6.6 $ 3.1 $ 3.0 $ 3.3 (1) Results from Marigold mine are only included in Goldcorp’s financial results for the period subsequent to the date of acquisition November 4, 2006. Prior period results are shown for comparative purposes only and may not include all pro forma financial adjustments required had the acquisition in fact taken place on January 1, 2006.
During the first quarter of 2007, the Marigold Mine produced 14,300 ounces of gold, compared with 27,200 ounces of gold produced for the first quarter of 2006. Gold production was impacted by lower grades and higher waste ore than expected in the Basalt Pit, and minor pit wall instability in the Basalt Pit which postponed the mining of a phase of this pit from early 2007 to 2008. The majority of the ore mined in late 2006 was from the Basalt Pit with the bulk of the recovery expected in the first quarter of 2007. Basalt ore recovery had a shortfall of approximately 20,000 ounces in the first quarter.
First quarter 2007 direct operating costs were approximately $4.1 million greater than the prior year direct operating costs primarily due to expensing higher stripping costs as compared to prior year. Cash costs in the first quarter of 2007 were $549 per ounce versus $280 per ounce for the first quarter of 2006, reflecting higher direct costs and lower ounces produced. Some direct operating costs increased over 2006 levels due to wage increases and commodity prices.
Wharf mine, United States Three Months Ended Operating March 31 December 31 September 30 June 30 March 31 Data 2007 2006 2006 2006 2006 ————————————————————————— Tonnes of ore mined 603,100 714,500 822,700 729,100 701,700 Tonnes of ore processed 597,800 682,800 854,400 715,300 787,900 Average grade of gold processed (grams/tonne) 1.36 1.12 0.91 1.04 1.01 Average recovery rate (%) 75% 75% 75% 75% 75% Gold (ounces) – Produced 14,000 18,000 19,600 15,500 9,900 – Sold 15,700 17,000 19,800 14,800 11,800 Average realized gold price (per ounce) $ 653 $ 619 $ 610 $ 618 $ 559 Total cash costs (per ounce) $ 330 $ 340 $ 354 $ 343 $ 315 Financial Data ————————————————————————— Revenues $ 10.7 $ 11.0 $ 12.7 $ 9.7 $ 7.2 Earnings from operations $ 4.0 $ 5.7 $ 2.9 $ 1.8 $ 1.9 (1) Tonnes of ore processed do not correlate directly to ounces produced during the quarter, as there is a time delay between placing ore on the leach pad and producing gold.
The Wharf Mine produced 14,000 ounces of gold in the first quarter of 2007 compared with 9,900 ounces of gold in the first quarter of 2006. The higher gold production is the result of higher gold grades mined and placed in inventory. In addition, the increase is due in part to the plant modifications of the strip circuit, designed to increase the metal production from inventory which were completed at the end of the first quarter 2006. Total cash costs for the quarter were $330 per ounce, compared to $315 per ounce during the first quarter of 2006, primarily as a result of higher severance tax that is driven by higher realized gold prices. Ore tonnes mined in the first quarter of 2007 are lower than the same period in 2006 as the moisture content from the lower levels of the phase 4 Trojan pit increased and limited crusher throughput. Modifications to the crusher will be completed in April 2007, which are expected to remediate the lower throughput.
San Martin mine, Honduras (1) Three Months Ended Operating March 31 December 31 September 30 June 30 March 31 Data 2007 2006 2006 2006 2006 ————————————————————————— Tonnes of ore mined 715,800 898,500 794,300 1,070,800 1,258,500 Tonnes of waste removed 1,307,900 1,083,000 1,172,100 1,180,400 1,020,200 Ratio of waste to ore 1.83 1.21 1.48 1.10 0.81 Tonnes of ore processed 715,800 898,500 795,800 1,070,800 1,258,500 Average mill head grade (grams/tonne) 0.66 0.80 0.86 0.74 0.74 Average recovery rate 55% 56% 54% 55% 57% Gold (ounces) – Produced 11,400 13,300 14,000 17,300 15,000 – Sold 11,400 14,000 14,500 17,400 15,700 Average realized gold price (per ounce) $ 657 $ 627 $ 611 $ 627 $ 556 Total cash costs (per ounce) $ 453 $ 419 $ 303 $ 359 $ 325 Financial Data ————————————————————————— Revenues $ 7.6 $ 8.9 $ 8.8 $ 11.0 $ 8.8 Earnings from operations $ 1.6 $ 1.0 $ 2.4 $ 2.3 $ 1.3 (1) Results from San Martin mine are only included in Goldcorp’s financial results for the period subsequent to the date of acquisition November 4, 2006. Prior period results are shown for comparative purposes only and may not include all pro forma financial adjustments required had the acquisition in fact taken place on January 1, 2006.
The San Martin mine produced 11,400 ounces of gold, compared with 15,000 ounces for the corresponding period last year. The decreased production relates to lower ore grades and a higher ore to waste ratio. The average mill feed grade was 0.66 grams/tonne compared to 0.74 grams/tonne in 2006. The San Martin mine is