Goldcorp shares rise as growth plan unveiled

• Canadian VANCOUVER gold miner

detailed an ambitious growth plan on Tuesday that includes increasing production as well as yet-tobe-mined reserves by 20 per cent over the next five years from existing operations and deposits, lifting its shares.

At an investor-day event, the Vancouver-based miner focused on the exploration potential at its mine sites and projects in the Americas, a turnaround from recent years when most miners’ attention was on reducing costs, not growth.

“Growth is not as dirty a word as it was a couple of years ago,” Goldcorp chief executive David Garofalo said, warning that the gold industry risked becoming irrelevant if it did not reverse a trend of falling output and reserves.

Goldcorp late on Monday said it expected to increase gold output by a fifth over the next five years to about three million ounces, driven by capacity ramp-ups at its Cerro Negro mine in Argentina and the Eleonore mine in Canada.

Its gold reserves are forecast to rise 20 per cent to 50 million ounces in the same period from the conversion of existing resources at its Century project in Ontario, Penasquito mine in Mexico and Pueblo Viejo mine in the Dominican Republic.

Goldcorp forecast its all-in sustaining costs to produce — the industry benchmark — falling by 20 per cent to US$700 an ounce by 2020.

“It is this long-term strategy of rising production and falling costs, with a focus on key current assets, that has us very excited about the future of Goldcorp,” Desjardins analyst Michael Parkin said in a note to clients.

Goldcorp’s shares closed up 3.24 per cent at $19.77 on the Toronto Stock Exchange.

In order to stem falling production and reserves, the world’s biggest gold miners should partner to share the risks of developing large gold deposits, Garofalo said.

“What we are looking to do on the M&A side is find more of those large resources that are undeveloped right now and do so in partnership with some of our senior peer companies,” he said.

“It is better to have two heads, to have two technical teams, two balance sheets,” he said.