Analyzing Goldcorp’s Marlin mine



Location and operations

Goldcorp’s (GG) Marlin mine is located in the western highlands of Guatemala. It’s an area with moderate to steep terrain. It has elevations ranging from 1,800–2,300 meters above sea level. Marlin was an open-pit and underground mine. Its open-pit operations stopped in early 2012. The final, higher-grade portion of the open-pit mine was completed. Now, Marlin is only an underground operation.


This is happening with other companies in the VanEck Vectors Gold Miners Index (GDX) as well. As economical deposits above ground are exhausted, mining companies—like GG, Barrick Gold Corp. (ABX), Newmont Mining Corporation (NEM), Agnico Eagle Mines (AEM), and Kinross (KGC)—are prospecting for gold underground.

Underground mining is more expensive compared to open-pit mining. This adds to the companies’ costs.

Successful exploration activities in the area indicate the potential to extend the life of this highly-productive mine. Marlin’s estimated mine life is five years. It had gold reserves of 0.65 million ounces and silver reserves of 30.09 million ounces as of December 2013.

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Mining operations

Until 2012, Marlin’s open-pit operations employed a conventional loader or truck cycle. It produced ~25,000 tons per day. Underground operations employ mechanized cut-and-fill long hole stoping mining. Production from underground operations in now ~3,200 tons per day.

High-grade and low-cost mine

Marlin is a high-grade mine. It had an average of 3.33 grams per ton of gold for 2013. This was higher than the company’s average. The higher grade lets it have low all-in sustaining costs (or AISC) of just $628 per ton—compared to $1,031 for Goldcorp.

It’s important to note that the SPDR Gold Shares (GLD) is a gold-backed exchange-traded fund (or ETF) that provides exposure to spot gold.


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