Goldcorp Inc. (GG) Q42012 Earnings Call February 15, 2013 1:00 PM ET

Operator

Good morning, ladies and gentlemen. Welcome to the Goldcorp Incorporated 2012 fourth quarter and year-end conference call for Friday, February 15, 2013. Please be advised this call is being recorded.

I would now like to turn the meeting over to Mr. Jeff Wilhoit, Vice President, Investor Relations at Goldcorp. Please go ahead, Mr. Wilhoit.

Jeff Wilhoit – Vice President, Investor Relations

Thank you, and welcome everyone to the Goldcorp fourth quarter and year-end earnings conference call. Among the senior management in the room with me today are Chuck Jeannes, President and Chief Executive Officer, Lindsay Hall, Chief Financial Officer, and George Burns, Chief Operating Officer.

For those of you participating on the webcast, we have included a number of slides to support this morning’s discussion. These slides are available on our website at www.goldcorp.com.

As a reminder, we will be discussing forward-looking information that involves unique risks concerning the business, operations, and financial performance and condition of Goldcorp. Forward-looking statements include, but are not limited to, statements with respect to future metal prices, the estimation of mineral reserves and resources, the timing and amount of estimated future production, cost of production, capital expenditures, and costs and timing of the development of new deposits.

Forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause the actual results to be materially different from those expressed or implied by such forward-looking statements. Accordingly, you should not place undue reliance on forward-looking statements.

With that, I will now turn the call over to Chuck Jeannes, CEO of Goldcorp.

Charles Jeannes – President, Chief Executive Officer, Director

Thanks Jeff, and thanks everyone for joining us today. When we last spoke about five weeks ago in conjunction with the issuance of our guidance and fourth quarter production, I mentioned the strong finish we had in 2012 and indeed the fourth quarter saw a new record for gold production at 700,400 ounces. This led to quarterly revenues of $1.4 billion and operating cash flow before working capital of $721 million. This was a result strong effort from most of the mines and particularly both Red Lake and Penasquito.

Gold grades at Red Lake drove a successful quarter and established a solid foundation for 2013. At Penasquito, all phases of the operation continued to improve and our confidence in the near-term water availability is increasing. We also believe that the water study underway will produce a solution that addresses our long-term needs for the Penasquito district. With the Pueblo Viejo joint venture achieving commercial production in January, the three linchpins of our 2013 performance are all headed in the right direction. Due to the board’s confidence in the future of our business, we elected to increase the dividend for the fourth time in three years to $0.60 per share.

So turning to the 2012 highlights. Production for the year was 2.4 million ounces at all-in sustaining cash cost of $874 an ounce. As I mentioned in January, all-in sustaining cash cost is a new metric we are adopting this year as are many of our peers in the industry. We believe this provides a more complete picture of the actual cost of producing an ounce of gold by including cash costs, sustaining thing capital corporate G&A, exploration expense and reclamation costs.

Going forward, we will provide regular quarterly reporting on this metric in addition to our traditional reporting on cash costs as we transition to the new approach. As the World Gold Council continued its work toward adopting an all-in cost measure, we plan to conform to the industry standard.