Goldcorp looks to cut costs on delayed El Morro project in Chile -CEO

Thu Oct 9, 2014 3:27am EDT
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MELBOURNE Oct 9 (Reuters) - Canada's Goldcorp is looking to cut costs on its planned and already-delayed $3.9 billion El Morro copper and gold project in Chile, and that may mean new permits are needed and further hold-ups, its chief executive said on Thursday.

The project has been caught up in a legal fight, and this week Chile's Supreme Court ruled El Morro's environmental permit should be suspended until Goldcorp holds fresh talks with the local Diaguita community, in line with the International Labor Organization convention.

While progress on the project has been mired down by the court battles, Goldcorp has been reviewing engineering plans to find a better way to build the mine and is continuing those studies, CEO Chuck Jeannes told reporters in Melbourne.

"It may put us back a bit from a time standpoint. But we need ... to get that deposit to the point where it's ready to build anyway," Jeannes said.

"If we have to go back to ... permitting at the very beginning, it could take another two to three years before we're even allowed to start," he said.

The company's five-year plan does not include any production from El Morro.

Goldcorp, the world's largest gold miner by market value, expects gold prices to increase steadily after next year, when it says its output will peak, but Jeannes said he expected prices to stay roughly between $1,150 and $1,400 through 2015.

Spot gold rose to $1,227.40 an ounce early on Thursday, before paring some gains to trade up 0.3 percent at $1,225.64 by 0708 GMT.