Peñasquito is a large and robust development project consisting of two open pits, Peñasco and Chile Colorado. It is one of the largest new mines in the world and will be the primary driver of growth for Goldcorp once production ramps up, producing an average of approximately 500,000 ounces of gold annually over the course of its mine life. Peñasquito is also projected to produce approximately 30 million ounces of silver and more than 400 million pounds of zinc annually.
Construction of the Peñasquito project began in 2006 and since then all major milestones have been achieved on time and on budget. The project is advancing with development risk being eliminated every step of the way. Mechanical completion of the first milling circuit is expected in mid-year 2009, the first production and sale of concentrates in the second half of the year, and commercial production as of January 1, 2010.
Approximately 20,000 ounces of gold and 1.3 million ounces of silver were produced from ancillary material from the deposit’s oxide cap in 2008. Eventual recoveries of gold from this material are expected to reach planned levels of approximately 50% over time. The large majority of precious metal reserves and resources are situated in the sulphide ore, which has demonstrated improved metallurgical recoveries and concentrate grades based on ongoing test work.
In 2009, work will also advance on three key optimization initiatives. First, initial studies have demonstrated the economic and operational desirability of eventually utilizing in-pit crushing and conveying, rather than an expanded fleet of diesel-powered trucks. We will also continue to pursue the opportunity to lock in a low-cost, reliable power source through a partnership with an independent power producer to build a gas-fired power plant. A more detailed assessment will also progress in 2009 to investigate the mining of underground high-grade zones and bulk-mining targets at Peñasquito.
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