Goldcorp Inc. (NYSE:GG) Q3 2018 Earnings Conference Call Transcript

Oct 25, 2018 • 01:00 pm ET

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Goldcorp Inc. (NYSE:GG) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen. Welcome to the Goldcorp Inc. Q3 2018 results conference call. Please be advised that this call is being recorded. I would now like to turn the meeting over to Mr. Shawn Campbell, Director, IR of Goldcorp. Please go ahead, Mr. Campbell.

Executive
Shawn Campbell

Thank you, operator, and welcome to the Goldcorp third quarter 2018 conference call.

(Forward-Looking Cautionary Statements)

For the formal part of the call today, we have David Garofalo, President and CEO; Todd White, EVP and COO; and Paul Harbidge, SVP, Exploration. Also, joining us are Jason Attew, EVP and CFO; Brent Bergeron, EVP, Corporate Affairs and Sustainability; and Charlene Ripley, EVP and General Counsel. For those of you participating on the webcast, we've included a number of slides to support today's discussion.

With that, I'll turn the call over to David Garofalo.

Executive
David Garofalo

Good afternoon, and thank you for joining us today. Steady project execution in the third quarter during a transition period at our flagship Penasquito mine continue to process of expanding and de-risking our operating mines towards achieving our 20/20/20 production growth and cost reduction objectives. At the same time, with our renewed focus on exploration, we essentially replaced gold reserve depletion across Goldcorp operated assets, establishing a strong foundation to achieve our gold reserve target of 60 million ounces by 2021. Along with our third quarter results, we are providing updated guidance for the fourth quarter and full-year estimates. Goldcorp expects to produce 620,000 ounces of gold at all-in sustaining costs for AISC of $750 per ounce in the fourth quarter of 2018.

The reduction in our full year guidance was primarily attributable to lower-than-expected gold production from Musselwhite during the construction phase of its Materials Handling Project. The cessation of equity counting of gold production for Leagold early in the year after its merger with the Brio Gold, as well as lower-than-budgeted grades of recoveries of Pueblo Viejo. However, all other mines remain within the previous guidance ranges and we still expect Cerro Negro and Eleonore to exit 2018 at optimum production rates.

During the third quarter of 2018, Goldcorp continued to advance our organic growth opportunities and projects, making significant progress on key permitting and development milestones. At Penasquito, the Pyrite Leach Project or PLP completed construction. First gold in commercial production are expected in the fourth quarter of 2018. The Materials Handling Project has achieved 80% overall project construction at Musselwhite. Capital cost of the project remain on budget. While the majority of major infrastructure remains on track for completion in the first quarter of 2019, lower-than-expected productivity and ground support installation has resulted in commissioning now being expected by the third quarter of 2019.

Further important project milestones were achieved at the Century Gold Project, where project description was submitted to regulatory authorities and a permitting process was initiated. And at the Coffee Project, which completed the adequacy phase with the territorial regulator allowing for advancement of the public consultation phase which is expected to be completed during the