Zeev's Turnips Patch-No Politics (ZEEV)

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*** Gold related post (GG) ***

ml,
Sure is a lot of 'news' coming out of Denver these days. <VBG>

Goldcorp Sees Big Potential For Red Lake Mine

Tuesday September 23, 6:16 pm ET
By Tom Locke, Of DOW JONES NEWSWIRES

DENVER (Dow Jones)--Goldcorp Inc.'s new drilling at its Red Lake Mine in Ontario expands the dimension of a deeper high-grade zone that could approach the significance of a huge high-grade zone above it, Chief Executive Robert McEwen told Dow Jones Newswires Tuesday.

Further exploratory drilling will determine what the potential of the lower deposit really is, but "the potential could be as much as another 3.8 million ounces of gold," McEwen said following his presentation here at Denver Gold Forum 2003, sponsored by the Denver Gold Group.

In his presentation, McEwen also stressed the importance of a $94 million, 7, 200-foot second shaft at Red Lake that will increase gold production there 40%, from about 500,000 ounces a year to about 700,000. It also will lower cash costs per ounce to $70 from $80, and provide some insurance as another access point should anything happen with the existing shaft.

The first full year of production after shaft completion is expected to be 2007. After the shaft is built, the company will be able to exploit lower-grade ore as well as high-grade ore, and it will expand production from 650 tons of ore a day to 1,000, with the capability of expanding to 2,500 tons a day.

One company goal is to expand to 1 million ounces of gold production a year, and it is looking at potential acquisitions in North America, South America and Europe to help it reach that goal, said McEwen. He said Goldcorp unsuccessfully tried for two years to buy Placer Dome Inc.'s Campbell Mine next to the Red Lake Mine.

"Our approach to (mergers and acquisitions) is to wait for the opportunity," said McEwen, and the company wants to be ready to take advantage of it when it arises.

As of June 30, Goldcorp had considerable acquisition ammunition: $200 million in cash, $68 million in marketable securities and $85 million in gold bullion.

That 245,000 ounces of gold bullion, or 25% more than that of the Bank of Canada, is a result of Goldcorp's retaining some of its gold production in anticipation of a rise in gold prices. McEwen said the price of gold is "going to test the $800 mark" over the next six to eight years. That's more than twice its current level near $390 an ounce.

"We're into a generational change in the marketplace," he said. Investors are concerned about preserving wealth in an environment of a weaker dollar, underfunded pension plans and governments incurring debts to keep economies propped up, and they are looking to gold as an investment to offset these factors, he said.

http://biz.yahoo.com/djus/030923/1816001362_1.html
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Goldcorp says won't be pushed into acquisitions

Tuesday September 23, 3:26 pm ET
By Nicole Mordant

DENVER, Sept. 23 (Reuters) - Goldcorp Inc. (Toronto:G.TO - News), one of North America's lowest-cost gold producers, said Tuesday it won't hurry into any acquisitions despite pressure from investors to expand its production rate and reduce reliance on a single mine.

Among gold mining companies, Toronto-based Goldcorp is known as one of the most aggressive marketers as well as the most outspoken opponent of hedging.

Both strategies have gone down well with investors, who have piled into its shares, helping them show a 36 percent annual compound growth rate over the past 10 years.

But after years of kudos for the low-cost operations at its Red Lake mine in Ontario, the 500,000-ounce-a-year gold producer is now facing criticism from investors who say its growth profile is positive but shallow.

"Our approach to mergers and acquisitions is to wait for the right opportunity. The problem is buying too quickly and not being able to digest," Goldcorp chairman and chief executive Rob McEwen said.

He was speaking to a roomful of fund managers and chief executives from the world's biggest gold mining companies, gathered at the annual Denver Gold Show.

McEwen said Goldcorp tried for two years to buy Placer Dome Inc.'s (Toronto:PDG.TO - News) Campbell Mine, which borders its Red Lake operation in northwestern Ontario. But Placer refused to sell.

For now, McEwen said, Goldcorp will focus on organic growth, expanding its operations at Red Lake, where its cash costs are $100 an ounce compared with the industry average of $212 an ounce.

The Toronto-listed producer begins to sink a second shaft at Red Lake in January next year, an expansion that will add 200,000 ounces to production from 2006 onward.

At the same time, Goldcorp continues to explore for new gold at Red Lake and Monday announced some encouraging early-stage results.

In keeping with its strong marketing drive, the company slipped a copy of the press release under the bedroom door of every delegate staying at the conference hotel.

The mid-tier producer is keeping its eyes open for potential acquisitions and has taken more than a passing interest in a couple of "highly liquid stocks," in which it recently made an investment of about $60 million.

"They are strategic in nature," McEwen said, but declined to name the stocks.

http://biz.yahoo.com/rc/030923/minerals_gold_show_goldcorp_1.html