TORONTO, April 6 (Reuters) - Goldcorp (G.TO) said a review of a feasibility study on its Cerro Negro project in Argentina indicates that the company can more than double the capacity of its gold output from previously projected levels.
The previous feasibility study on Cerro Negro had projected annual gold output of between 200,000 and 250,000 ounces. The company now says the mine, which is expected to begin operations in mid-2013, will on average produce about 550,000 ounces a year, during the first five years alone.
“The positive results in this feasibility study confirm our expectations that Cerro Negro will contribute tremendous value for shareholders as Goldcorp’s next cornerstone gold mine,” Chief Executive Chuck Jeannes said in Tuesday evening statement.
Goldcorp acquired the Cerro Negro project when it acquired exploration company Andean Resources for C$3.6 billion in September. [ID:nSGE6820BF]
The mine, which has a projected mine life of about 12 years, will cost about $750 million to develop, the company said. Cerro Negro has proven and probable gold reserves of 4.26 million ounces, along with 36.16 million ounces of silver.
Average cash costs at the mine are expected to be less than $200 per ounce during the first 5 years of operation. Over the full 12-year mine life, based only on existing reserves, annual production is expected to average 340,000 ounces per year at cash costs of about $290 per ounce. (Reporting by Euan Rocha; editing by Janet Guttsman)