OTTAWA – Goldcorp Inc. (TSX:G) hopes to grow its production by 60 per cent to four million ounces a year over the next five years as it brings several projects on stream.
“This is a very realistic and achievable growth profile based on projects that are already under development,” Goldcorp chief executive Chuck Jeannes told a conference call with financial analysts Friday.
Jeannes said the Vancouver-based company plans to spend $1.8 billion on developing its projects.
“With Penasquito ramping up and our Pueblo Viejo joint venture advancing toward commissioning in the fourth quarter of this year, our focus in 2011 will be on development of our growth pipeline,” he said.
On Thursday, the company said its Eleonore gold project in Quebec and Cochenour gold project in Ontario have both received approval for full-scale development.
The Eleonore project is expected to cost $1.4 billion, while Cochenour is expected to cost $420 million. Both are expected to start gold production in the fourth quarter of 2014.
Goldcorp increased its quarterly dividend as it reported a fourth-quarter profit of US$327.7 million, or 44 cents per share, on $1.32 billion in revenue. That compared with a profit of $65.8 million, or nine cents per share, on $778.3 million in sales a year ago.
The company reported an adjusted profit of $417.1 million or 57 cents per share in the quarter, up from $182.7 million or 25 cents per share a year ago. The average analyst estimate had been for a profit of 47 cents per share, according to Thomson Reuters.
The new monthly dividend of 3.33 cents per share is up from an earlier dividend of three cents per share.
“Going forward expect us to revisit the dividend on an annual basis and in an increasing cash flow environment we would expect the dividend to increase as well,” Jeannes said.
UBS analyst Brian MacArthur rated Goldcorp a “buy” with a US$64 12-month price target for the company’s shares.
Goldcorp shares were up $1.59 at $46.04 in afternoon trading Friday on the Toronto Stock Exchange.
“Goldcorp offers the highest five-year growth profile in our senior gold coverage universe, is unhedged, has relatively low political risk and exploration upside,” MacArthur wrote in a note to clients.
Goldcorp has mines as well as exploration and development projects in Canada, the United States, Mexico, Guatemala and Argentina. It employs more than 14,000 people
The company recently signed a deal with Quebec’s Cree regarding the development and operation of the Eleonore gold project in northern Quebec.
Under the agreement, Goldcorp recognizes and respects the rights and interests of the Cree, while the Cree recognize and provide support to the rights and interests of Goldcorp to develop the mine.
