Goldcorp's Massive Eleonore Mine Has Potential To Grow - Chuck Jeannes

(Kitco News) - Goldcorp Inc.’s massive Eleonore mine, located in the James Bay region of northern Quebec, has the potential to produce beyond its anticipated 600,000 ounces of gold annually.

The company is currently expecting first pour in the fourth quarter of 2014, with commercial production expected in the first quarter of 2015. Ramp-up to its full potential of 600,000 ounces annually is expected to go through 2018.

Speaking with Kitco News at the 25th Denver Gold Forum, Chuck Jeannes, president and chief executive officer of Goldcorp, said that while the mine will be a large gold producer, there’s still potential for more.

“This is the kind of deposit - a Hemlo style deposit - that can continue to grow significantly, Jeannes said. “We haven’t seen the bottom of it, we continue to have success looking at new areas of the deposit, both to the north and the south, so we’re a long way from figuring out what’s there.

“We’ve always believed that there’s potential for a district scale opportunity and we’ll be the first ones looking for it.”

Jeannes said that his team at Eleonore is working diligently to speed up the ramp-up process.

“It’s a vertical dipping ore body so development takes longer and it’s a steady ramp-up over that period, “ he said. “The guys there are trying to find ways to advance that ramp-up schedule.”  

Goldcorp likes mining in Quebec, and despite a rough patch that the province experienced with the mining sector over the last two years, Jeannes maintains the company will continue to look at Quebec as a part of its production structure, recently highlighted with their attempt to acquire Osisko and its Canadian Malartic mine.

“When everything is done with Eleonore, we’ll have invested $2 billion into the province,” he said. “We love the people there, the infrastructure, the support and tradition of mining in the province. We would like to do more business there.

“That was why we tried to acquire Osisko,” he continued. “We’re not going to pay too much for things but we would definitely like to do more business in Quebec. We’re in business to make money, not buy projects at any price.

“It doesn’t matter how good the project is, and [Canadian Malartic] is good, but if you have to pay too much then you can’t make money for shareholders,” he said.

Looking at gold prices, Jeannes expected range trading and volatility in 2014 but believes the yellow metal will rise in the longer-term.

“I said it at the beginning of the year that this would be a year where we traded in a fairly tight range because there’s just a lot of push and pull with the decline in investment demand, largely due to the strength in the U.S. economy and the U.S. dollar on the one hand, and physical demand continuing to increase in Asia on the other,” he said. “I personally think gold will increase, whether it’s this year or next year, it’ll definitely go up.

“I’m not one who believes in the explosive $5,000 an ounce view, but I can easily see us being in a long-term bull market for gold where it increases,” he added. “We’re going to have declining mine supply forever - I don’t think we’ll ever produce as much gold as we will in 2015, so that side of the equation is very understandable.”

Courtesy: Kitco News