Sales of copper from El Morro will more than pay for the costs of gold production at the project, Chief Executive Officer Chuck Jeannes said today in a telephone interview. Eleonore’s gold-production cost is estimated at $400 an ounce, lower than the company’s overall 2010 costs, not including byproducts, of $450 an ounce, he said.
Jeannes is looking to keep production rising beyond 2014, when Vancouver-based Goldcorp is aiming to produce 3.8 million ounces of the precious metal a year, from a forecast of 2.6 million ounces this year.
The company announced in January that it planned to acquire El Morro from Xstrata Plc. in a transaction with Xstrata partner New Gold Inc. Goldcorp advanced New Gold $463 million to allow New Gold to acquire the 70 percent of El Morro it didn’t own and then agreed to pay New Gold an additional $50 million to get full control of the project. The transaction blocked Barrick Gold Corp.’s earlier offer to acquire the mine for $465 million.
Barrick, the world’s biggest gold producer, claims Goldcorp’s deal with New Gold is illegal and asked a judge to halt the sale.
Goldcorp gained control of Eleonore as part of a $420 million equity transaction completed in 2006.
Goldcorp fell 78 cents, or 1.9 percent, to C$40.09 at 4:16 p.m. in Toronto Stock Exchange trading. The shares have declined 3 percent this year.
Sourc:ebusinessweek.com/
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