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How Are Goldcorp’s Project Pipelines Doing?

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Strong organic project pipeline

Goldcorp (GG), along with Newmont Mining (NEM) and Agnico Eagle Mines (AEM), has one of the strongest project pipelines in the industry. Goldcorp mentioned during its earnings call that it will compound returns by focusing on its existing mines with organic growth and brownfield exploration around its existing infrastructure. This will drive higher returns at lower risk.

Following are some of the projects not already in the guidance that could contribute to the company’s production profile over the next three to five years.

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  • Red Lake: Goldcorp stated during its earnings call that its knowledge of HG Young and Chochenour will contribute to Red Lake’s optimization plan.
    • The exploration and evaluation of HG Young, a high-grade exploration discovery near Red Lake, is ongoing. A concept study is expected in the fourth quarter. Positive results for the study will result in commencing of a prefeasibility study starting in 2017.
    • Cochenour: Cochenour was moved back into advanced exploration stage project, and its production forecast was removed from guidance for 2016 and beyond. The company will conduct a program of detailed drilling, drifting, and sampling to understand its geology better.
  • Borden: A prefeasibility study is underway to determine the optimization of a combined Borden-Porcupine operation and is expected to be completed during the first quarter of 2017.
  • Cerro Negro: At Cerro Negro in Argentina, the focus in 2016 will be on infrastructure development and capital allocation toward realizing the full potential of the mine. At Cerro Negro, drilling will focus on resource conversion and extending newly discovered high-grade ore shoots in the Marianas zones.
  • Éléonore: The drilling program at Éléonore in 2015 led to a 7.7% increase in reserves of 5.4 million ounces and extended the deposit at depth. Drilling in 2016 will continue to focus on reserve replacement and test the deep projection of center and southern ore bodies.
  • Los Filos: The company mentioned that a key priority at Los Filos is on improving the economics of future pit phases through the upgrading of the resource grade. Work also continues on advancing high-potential early-stage targets in Mexico to a discovery stage.

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).

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