TORONTO (Reuters) - Goldcorp Inc (G.TO) said on Tuesday it expects gold production to grow by 13.5 percent this year to 2.6 million ounces, although the cost-per-ounce will also rise.
Canada’s No. 2 gold producer forecast its total cash costs at about $250 per ounce in 2008, up from its guidance of $150 per ounce in 2007.
This was due to Goldcorp taking full ownership of two previous joint-ventures in Canada, Porcupine and Musselwhite, and also because the company’s Los Filos mine in Mexico will log its first full year of production.
The company said it had not firmed up last year’s costs, but they would be “slightly higher than” expected.
Goldcorp, based in Vancouver, British Columbia, said production grew 35 percent to 2.29 million ounces in 2007, at the high end of its forecast range.
Production grew to a record 633,000 ounces in the fourth quarter.
The company credited expansion in “safe countries,” including 80 percent of production in NAFTA member states, for the growth. Production is expected to rise as 2008 progresses.
The market responded by pushing the stock up C$1.35, or 3.6 percent, to C$38.67 on the Toronto Stock Exchange, while the gold subsector was up 4.9 percent.
“It doesn’t look like there’s anything particularly surprising,” said Mark Smith, analyst at Dundee Securities, who noted the forecast was in line with expectations.
The company forecasts capital expenditure of $1.2 billion this year, including $700 million at the Penasquito site in Mexico and $150 million at the Eleonore project in Quebec.
Exploration costs are seen at $150 million in 2008.
Looking ahead, Goldcorp expects total cash costs to remain below $250 per ounce over the next five years.
Reporting by Jonathan Spicer; Editing by Bernadette Baum