* Goldcorp shares up after Q4 results top expectations (Adds details from interview, background)
By Euan Rocha
TORONTO, Feb 25 (Reuters) - Canadian mining major Goldcorp (G.TO) plans to turn most of its attention this year toward developing its large portfolio of gold projects spread across the Americas, Chief Executive Chuck Jeannes said.
“Our focus is going to be delivering value to shareholders from the various projects that we have at different stages of development in the pipeline,” said Jeannes in an interview with Reuters late on Thursday.
“This is where we are going to be devoting most of our attention,” he said. “We enhanced the portfolio dramatically over the last couple of years and now we have those projects in front of us and it’s time to build them.”
The Vancouver-based precious metals miner has been in an active deal mode over the last several years, and in just the past year alone it outbid and outmaneuvered rivals on three large deals.
Goldcorp has also sold a number of noncore assets and investments as it continues to hone in on mines with lower operating costs.
The emphasis on lower-cost mines was evident in the fourth-quarter and full-year results that Goldcorp reported on Thursday. Its earnings breezed past expectations, sending its shares up more than 3 percent in both New York and Toronto on Friday. [ID:nN24290403]
The company also raised its annual dividend payout and said its board has approved the full-scale development of two key projects in Canada — the Eleonore project in Quebec and the Cochenour project in Ontario. The two projects, which are expected to begin operating in late 2014, will raise Goldcorp’s output by more than 850,000 ounces annually.
Over the course of the last decade, Goldcorp has more than tripled its annual gold output to more than 2.5 million ounces and has expanded from a mid-tier gold company into one of the industry’s fastest growing majors.
Since Jeannes took over the reins in early 2009, Goldcorp’s shares have risen close to 50 percent, making it the top performer among its North American peers over the period.
Jeannes, who began his career as a lawyer specializing in minerals transactions, said the market has driven up valuations in the mining sector.
“We think we were able to find some good deals among the things that were available,” he said. “If you look, you can continue to find some, but our focus is going to be on building our new mines.”
Much of Goldcorp’s attention recently has been focused on developing the Penasquito mine in Mexico, which began commercial production in September. The gold-silver mine is expected to ramp up to full design capacity soon and produce about 350,000 ounces of gold this year.
Goldcorp, along with its partner Barrick Gold (ABX.TO), is also advancing the Pueblo Viejo gold project in the Dominican Republic, which they expect will begin production in early 2012.
Jeannes said he is pleased that Goldcorp’s board has decided to push forward with the development of Cochenour and Eleonore in Canada.
In a note to clients, TD Newcrest analyst Greg Barnes noted that the new plans outlined by Goldcorp for developing the two assets were positive, as cash costs at both sites are projected to be lower than anticipated, while the mine life at both sites is expected to be longer than had been expected.
“All in all, we believe that investors should be positively surprised by the upside that management has outlined at both projects,” he said.
The company is already the largest producer of gold mined within Canada with its mines at Red Lake in Ontario accounting for a large chunk of its annual production. The new Cochenour project is in the Red Lake district.
“We are very excited to be reinvesting in Canada and adding close to a million ounces of new production in Canada,” Jeannes said. (Reporting by Euan Rocha; editing by Peter Galloway)