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Can Goldcorp’s Strong Project Pipeline Have a Long-Term Effect?

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Strong organic project pipeline

Goldcorp (GG), Newmont Mining (NEM), and Agnico Eagle Mines (AEM) have some of the strongest project pipelines in the industry. Goldcorp wants to optimize its portfolio of assets by reinvesting in its pipeline of organic opportunities. These have the potential to drive Goldcorp’s production growth in the long term. Let’s look at its projects in detail.

The above chart shows Goldcorp’s ongoing projects and their timelines.

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Investment decision

Goldcorp’s budget this year has $100 million to advance its internal growth projects through their study phases. Out of this budget, $26 million have already been spent year-to-date. The company expects to advance its Peñasquito Pyrite Leach (or PLP) and Musselwhite Materials Handling (or MHP) projects to the board for an investment decision around the middle of the year. If approved, PLP could start production as soon as the first quarter of 2019, while MHP could go into production by the end of 2018.

Pre-feasbility stage projects

The Camino Rojo Oxide project at the Peñasquito mine is in a pre-feasibility study stage in 2016. It’s expected to be completed by 4Q16. The Borden project at Porcupine mine is also in a pre-feasibility study stage. The company expects to get the advanced exploration permit for this project by late 2016. After that, Goldcorp will be able to construct a ramp into the deposit and extract a 30,000-ton bulk sample.

Investors looking to invest in gold might also look for leveraged ETFs such as the Direxion Daily Junior Gold Miners Bull 3X ETF (JNUG) and the Direxion Daily Gold Miners Bull 3X ETF (NUGT).

Next, let’s see if we should be worried about Goldcorp’s costs going higher.

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