STRATEGY.
DISCIPLINE.
EXECUTION.
MARCH 21, 2013
Mines & Money Hong Kong
AGENDA
GOLD, THE GOLD SECTOR AND
GOLDCORP
Gold price – is the bull market over?
Gold equities – why the underperformance?
Goldcorp – how are we changing the paradigm?
2
FO RWA R D LO O K I N G STAT E M E N T S
This presentation contains “forward-looking statements”, within the meaning of the United States Private Securities Litigation Reform Act of 1995
and applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of Goldcorp Inc.
(“Goldcorp”). Forward-looking statements include, but are not limited to, statements with respect to the future price of gold, silver, copper, lead
and zinc, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future
production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities,
permitting time lines, hedging practices, currency exchange rate fluctuations, requirements for additional capital, government regulation of mining
operations, environmental risks, unanticipated reclamation expenses, timing and possible outcome of pending litigation, title disputes or claims and
limitations on insurance coverage. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as
“plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not
anticipate”, “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”,
“might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements are subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity, performance or achievements of Goldcorp to be materially different from those expressed
or implied by such forward-looking statements, including but not limited to: risks related to the integration of acquisitions; risks related to
international operations; risks related to joint venture operations; actual results of current exploration activities; actual results of current
reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold,
silver, copper, lead and zinc; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as
anticipated; accidents, labour disputes; delays in obtaining governmental approvals or financing or in the completion of development or
construction activities and other risks of the mining industry, as well as those factors discussed in the section entitled “Description of the Business –
Risk Factors” in Goldcorp’s annual information form for the year ended December 31, 2012 available at www.sedar.com. Although Goldcorp has
attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements,
there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will
prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers
should not place undue reliance on forward-looking statements. Goldcorp does not undertake to update any forward-looking statements that are
included in this document, except in accordance with applicable securities laws.
All amounts are in U.S. dollars, unless otherwise stated.
3
GOLD PRICE –
WHAT’S NEXT?
WHY GOLD?
12 Consecutive Years of Gold Price Growth
516%
increase
over 2000
2000
Central bank
buying
Dec. 31, 2000 – Dec. 31, 2012
Safe haven/
asset class
Currency
protection
Inflation
hedge
Stable
investment
demand
Flat mine
supply
China
factor
Growing
physical
demand
2012
Continued
debasement of
international
currencies
5
THREE FACTORS HAVE THE GREATEST IMPACT ON PRICE
Private Investment Demand is the Determining Factor
Private investment
Physical demand has grown steadily, especially in emerging markets
Shorter term speculative demand is quite volatile and sensitive to:
Real interest rates
Market uncertainty or volatility
Inflation expectations
Central banks
Central banks in developing countries have been increasing gold reserves
Jewellery
Jewellery demand in tonnage terms has decreased over the past decade
but continues to increase in dollar terms due to emerging market demand
6
CENTRAL BANKS
With Increases in Gold Price, Growth in Money Supply - Reserves Are Still Low
World Offical Gold Reserves
38,000
36,000
Tonnes
34,000
32,000
30,000
Source: World Gold Council.
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
28,000
7
GOLD & SILVER RETURNS - US REAL INTEREST RATES
Low Real Interest Rates Correlate to High Gold & Silver Prices
Gold & Silver Returns in Different US Real
Interest Rate Environments
Source: Deutsche Bank, Bloomberg.
8
HIGHER INFLATION …. WHEN?
Expansion of Money Supply will eventually have Consequences
In 2013 – QE continues, with the US Federal Reserve
openly committed to open-ended bond purchases
through 2015
No end in sight until the Fed sees “substantial
improvement in the outlook for the labour market”
The benchmarking of QE to employment seen by
many as “uncontrolled” expansion of money supply
9
YOU CAN’T PRINT MORE GOLD...
Strong Correlation between Growing Money Supply and Higher Gold Price
3,000
2,000
M1
Gold
1,800
1,600
1,400
2,000
1,200
1,000
1,500
800
Gold Price (US$/oz)
US M1 Money Supply ($Billions)
2,500
600
1,000
400
200
500
1990
0
1992
1994
Source: Bloomberg data Jan. 12, 2012 – Mar. 4, 2013
1996
1998
2000
2002
2004
2006
2008
2010
2012
10
US FEDERAL DEBT AND GOLD PRICE
US Debt Levels will Continue to Grow
Massive Debt Burden Supports Gold Long Term
Source: U.S Office of Mgmt & Budget, Bloomberg, BMO CM
11
FROM 2012 TO 2013
Another Year of Volatile Gold Price Performance?
1,850
Key Drivers of Gold Price
Volatility in 2012:
1,800
1,750
Fed quantitative
easing
1,700
Economic uncertainty
in Europe
$ per ounce
1,650
1,600
1,550
1,500
1,450
1,400
Jan-12
Mar-12
May-12
Source: Bloomberg data Jan. 12, 2012 – Mar. 12, 2013
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
12
GOLD STOCKS – WHY THE
UNDERPERFORMANCE?
DECLINING VALUATIONS OF GOLD COMPANIES
Senior/Intermediate Historical Price to Net Asset Value Multiple
The graph below highlights the multiple contraction of senior gold producers over recent years (as P/NAV
$1,900
Sr./Int. P/NAV Multiple
Spot Gold
US$/Oz
1.90
Spot Gold (US$/Oz)
$1,500
1.70
$1,300
1.50
P
$1,100
1.30
$900
1.10
$700
0.90
$500
0.70
$300
Jul-03
0.50
Source: Canaccord Genuity.
Jul-04
Jul-05
Jul-06
Jul-07
Jul-08
Jul-09
Jul-10
Jul-11
P/NAV Multiple (5%/Spot)
$1,700
2.10
Jul-12
14
GOLD STOCKS HAVE UNDERPERFORMED GOLD
Positive Absolute Returns but Lagging Gold Price Performance
470%
Gold Price
+358%
370%
270%
Goldcorp
+161%
Peers*
+75%
Philadelphia
Gold / Silver Index
+75%
Dow Industrials
+68%
170%
70%
-30%
2003
2005
* Peers include: Barrick, Newmont, Kinross and Agnico
Source: Bloomberg data Jan. 1, 2003 – Mar. 12, 2013
2007
2009
2011
2013
15
REASONS FOR GOLD STOCK UNDERPERFORMANCE
All of the Factors can be Positively Addressed
Cost inflation has limited expected margin growth
Lack of new discoveries and real reserve growth
Poor capital allocation decisions/company missteps
16
CO ST I N F L AT I O N
Cost Increases Nearly Equivalent to Rise in Gold Price
Total Capex = development + sustaining capital expenditures
All in Costs = total cash cost + development capex + sustaining capex + exploration cost
1,000
2012 CAGR
900
Total Capex
800
20%
700
2000 Base = 100
Gold Price
16%
600
All in Cost
500
15%
400
Total Cash Cost
11%
300
200
100
0
2000
2001
2002
2003
2004
Total Capex
2005
2006
Gold Price
2007
2008
Total Cash Cost
2009
2010
2011
2012
All in Cost
Source: Bloomberg, Scotiabank GBM
17
CO ST I N F L AT I O N
Significant Portion of Cost Inflation is Avoidable
Components of all-in cost 1 inflation for C90 producer
15.1%
3.0%
Nominal
geological
inflation2
1.0%
1.7%
4.3%
Nominal cost
inflation
Grade decline
Recovery decline
Mine conditions
decline
Mine real site
inflation
2.8%
USD weakness
2.3%
CPI
2001-11
BASED ON CANADA AND AUSTRALIAN MINE SAMPLE
1 Costs
include depreciation and sustaining capex, but not growth
based on study of total factor productivity in Australia and Canada, which showed average geological inflation of 3–3.5% over 30 years
Source:
McKinsey Mining Practice, GFMS
2 Estimated
18
A L L - I N CO ST R E P O RT I N G
What’s included:
Why?
By-product cash
text costs
Current metrics do not capture all
expenditures key to analyzing a
company’s profitability
Sustaining capital
text
More complete picture of industry
profitability to stakeholders
Corporate general and
text
administrative expense
More effective correlation to current
gold equity valuation
Working towards a consistent,
industry-wide standard
Exploration text
expense
IMPROVED CASH COST DISCLOSURE
19
EXPLORATION INVESTMENT HAS NOT GENERATED
DISCOVERY EXCITEMENT
Gold Discovered in Large Deposits has Declined while Exploration Spending has Increased
Growth in exploration
spending
Growth in
discoveries
Gold discovered in
deposits of +1moz reserves
or +2moz resources
Moz
Discovery
Total exploration
spending1
Billions
90
18
80
16
70
14
60
12
50
10
40
8
30
6
20
4
10
2
0
Exploration
CAGR
23% p.a
-28% p.a
0
1999 2000
Source: Lassonde, MEG
01
02
03
04
05
06
07
08
09
10
2011
20
GOLDCORP – HOW
WILL WE CHANGE
THE PARADIGM?
C H A L L E N G ES FAC I N G T H E G O L D I N D U ST RY
Industry
Goldcorp
Missed guidance
Revamped planning and
forecasting
Lack of growth
Quality reserve growth
Only N.A. senior with YoY growth
Poor capital allocation
decisions
Disciplined M&A and divestitures
No writedowns
Operating cost escalation
Operating for Excellence
D E L AY E D FC F
A C L EA R PAT H TO FC F
22
CO N S I ST E N T ST R AT EG I C FO C U S
Quality
Growth
Cost
Management
Low
Political
Risk
TOGETHER
CREATING
SUSTAINABLE
VALUE
Responsible
Mining
Practices
Peer-Leading
Balance
Sheet
23
A L L - I N S U STA I N I N G C A S H CO ST S
Goldcorp is the Lowest Among its Peers
As of Dec. 31, 2012
1,200
1,000
US$/oz
800
600
400
200
0
Goldcorp
Barrick
By-product cash cost
Kinross
Newmont
All-in sustaining cash cost
24
CO M M I T M E N T TO CO ST CO N TA I N M E N T
Operating for
Excellence
A GLOBAL INITIATIVE
25
RO B U ST D E V E LO P M E N T P I P E L I N E
Quality Production Growth
SCOPING
FEASIBILITY
CAMINO ROJO
(SULPHIDES)
CONSTRUCTION
PRODUCTION
CAMINO ROJO
(OXIDES) (2016)
PEÑASQUITO UG
EL MORRO
El MORRO U/G
CERRO NEGRO (2013)
PUEBLO VIEJO (2012)
ÉLÉONORE (2014)
AGUA RICA
PEÑASQUITO (2010)
COCHENOUR (2015)
CERRO BLANCO
LOS FILOS (2008)
MARLIN (2006)
RED LAKE & OTHER
OPERATING MINES*
* PORCUPINE, MUSSELWHITE, EL SAUZAL, ALUMBRERA, MARIGOLD, WHARF
26
5 YEAR PRODUCTION GUIDANCE
Realistic, Achievable Growth Profile
Increasing Production
~70%
4.0 - 4.2
3.8 - 4.0
3.5 - 3.8
Gold production (Moz)
3.2 - 3.5
2.55 - 2.8
2.4
2012A
2013E
2014E
2015E
2016E
2017E
27
LOW C A P I TA L I N T E N S I T Y P ROJ EC T S
Strong Acquisitions Lead to High Quality Projects
(as at Dec. 31, 2012)
Capital Spending for Projects Contributing
to 5-Year Growth Profile
$3.1B
$2.0B
$0.4 B
SPENT
COMMITTED
OUTSTANDING
LOW CAPITAL COST / OZ OF <$240
*
Contributing to 5-year growth: Pueblo Viejo, Cerro Negro, Éléonore, Cochenour and Camino Rojo
28
S U C C ES S F U L C A P I TA L A L LO C AT I O N ST R AT EGY
5 Year Impairment Losses as a % of Current Book Equity
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
-10%
Barrick
Newmont
2012
*
Barrick includes losses on capitalized gold contracts
2011
Kinross
2010
2009
Goldcorp
2008
2007
29
STRONG CASH FLOW GROWTH (‘13E – ‘15E)
Quality Production Growth Translates into Increasing Cash Flow
51%
-1%
8%
14%
16%
Yamana
Agnico
$4.26
$4.73
2014E
2015E
$3.13
2013E
-8%
Kinross Newmont Barrick
Source: Bloomberg consensus (as of Mar. 12, 2013)
Dollar figures are cash flow per share estimates 2013E – 2015E
Goldcorp
30
RETURNING SHAREHOLDER VALUE
Consistent Dividend Growth
Dividend ($ per
Dividend
upshare)
233%
since 2009
Significant return of
Dividend ($ per share)1
Dividend as % of Operating Cash Flow2
capital to shareholders
$0.54
$0.60
25%
$0.18
$0.21
2009
2010
11% 10%
2011
21%
19%
$0.41
2012
2013E
KGC
14%
12%
ABX
14%
12%
AUY
2013E
14%
GG
NEM
2014E
1Dividend
increases (annual):
Oct. 27, 2010 - $0.36/share; Feb. 24, 2011 - $0.40/share; Dec. 5, 2011 - $0.54/share; Jan. 7, 2013 - $0.60/share
2Source: Bloomberg consensus (as of Mar. 12, 2013)
31
ALLOCATION OF FREE CASH FLOW
Management’s Most Important Decisions
Fund existing
70% growth
profile
Invest in high
return organic
growth
Flexibility for
selective
M&A
Regular
dividend
growth
32
CONCLUSIONS
Charting the Path towards Long Term Success
The gold bull market is far from over
Gold equities can outperform gold price
Quality growth, cost containment and disciplined
capital allocation will determine the winners in this
market
33
STRATEGY.
DISCIPLINE.
EXECUTION.
MARCH 21, 2013
Mines & Money Hong Kong
APPENDIX A - 2013 SENSITIVITIES
Base Price
Change
Increments
CFPS
($/share)
By Product
Cash Costs
($/oz)
FCF
($mm)
Gold Price ($/oz)
$1,600
$100
$0.25
$1
$205
Silver Price ($/oz)
$30.00
$3.00
$0.06
$27
$52
Copper Price ($/lb)
$3.50
$0.50
$0.04
$17
$32
Zinc Price ($/lb)
$0.90
$0.10
$0.03
$11
$21
Lead Price ($/lb)
$0.90
$0.10
$0.01
$5
$10
Canadian Dollars
1.00
10%
$0.05
$19
$152
Mexican Peso
12.75
10%
$0.04
$15
$39
$100.00
10%
$0.02
$9
$16
$0.09
10%
$0.02
$11
$20
Diesel ($/barrel)
Electricity ($/kWh)
35
APPENDIX B - OPERATING COSTS BREAKDOWN
CONSOLIDATED
5%
7%
22%
5%
2%
15%
16%
9%
8%
11%
Labour
Contractors
Fuel Costs
Power
Maintenance Parts
CANADA / USA
3%
2%
6%
Consumables
Tires
Explosives
MEXICO
4%
4%
7%
11%
11%
13%
17%
4%
4%
3%
18%
2%
9%
15%
18%
8%
Others
CSA
6%
38%
Site Costs
8%
10%
5%
6%
17%
10%
11%
12%
18%
36
APPENDIX C - GOLD MINERAL RESERVES
GOLDCORP MINERAL RESERVES
PROVEN
(as of December 31, 2012)
Ownership
GOLD
Tonnage
Grade
PROBABLE
Contained
Tonnage
m oz
mt
g Au/t
m oz
mt
g Au/t
m oz
0.36
0.91
2.51
0.23
0.02
81.26
0.36
0.93
66.76
0.76
1.63
66.76
0.76
1.63
-
-
-
-
18.91
9.43
5.74
100.0%
-
-
Cerro Blanco
100.0%
-
-
Cerro Negro
100.0%
11.08
0.01
Cochenour
100.0%
-
-
Dee
40.0%
0.56
70.0%
Eleonore
100.0%
Los Filos
100.0%
Contained
g Au/t
Camino Rojo
100.0%
Tonnage Grade
mt
Alumbrera
El Sauzal
Contained
78.75
37.5%
El Morro
Grade
PROVEN & PROBABLE
0.04
233.95
18.87
9.43
5.72
-
-
-
-
-
20.42
1.44
0.95
20.42
1.44
0.95
4.24
215.56
0.36
2.49
449.51
0.47
6.73
4.42
1.52
0.22
-
-
12.48
7.56
3.03
12.48
7.56
3.03
72.61
0.96
2.25
224.10
0.72
5.18
296.71
0.78
7.43
Marigold
66.7%
23.37
0.68
0.51
173.06
0.50
2.77
196.43
0.52
3.28
Marlin
100.0%
3.52
3.37
0.38
3.91
4.91
0.62
7.44
4.18
1.00
Musselwhite
100.0%
5.26
6.79
1.15
5.97
5.94
1.14
11.23
6.34
2.29
Noche Buena
100.0%
-
-
-
-
-
-
Penasquito Heap Leach
100.0%
32.34
0.15
0.16
87.41
0.13
0.36
119.75
0.13
0.52
Penasquito Mill
100.0%
577.90
0.55
10.27
484.71
0.31
4.90
1,062.60
0.44
15.17
Porcupine
100.0%
27.79
1.57
1.40
80.98
1.13
2.94
108.78
1.24
4.35
Pueblo Viejo
40.0%
13.88
3.49
1.56
96.06
2.74
8.45
109.94
2.83
10.01
Red Lake
100.0%
2.00
11.85
0.76
8.49
9.04
2.47
10.48
9.57
3.23
San Nicolas
21.0%
-
-
-
-
-
-
Wharf
100.0%
0.81
0.27
0.31
22.12
0.82
0.58
Totals
10.32
23.87
11.80
0.82
42.99
67.08
1. Mineral Reserves are estimated using appropriate recovery rates and US$ commodity prices of $1,350 per ounce of gold, $24 per ounce of
silver, $3.00 per pound of copper, $0.80 per pound of lead, and $0.85 per pound of zinc, unless otherwise stated below:
1. Alumbrera
$1,400/oz gold and $3.20/lb copper
2. Pueblo Viejo, Dee
$1,500/oz gold, $28/oz silver, $3.00/lb copper
37
Endnotes
1. The Company has included non-GAAP performance measures, performance measures, total cash cost per gold ounce and all-in sustaining cash cost per gold ounce,
throughout this presentation. The Company reports both of these measures on a sales basis.
Total cash cost per gold ounce in the gold mining industry is a common performance measure but does not have any standardized meaning, and is a non-GAAP measure.
The Company follows the recommendations of the Gold Institute standard. All-in sustaining cash costs include by-product cash costs, sustaining capital, corporate
general & administrative expenses and exploration expense.
The Company believes that, in addition to conventional measures, prepared in accordance with GAAP, certain investors use this information to evaluate the Company’s
performance and ability to generate cash flow. Accordingly, they are intended to provide additional information and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with GAAP.
Production costs in 2013 are allocated to each co-product based on the ratio of actual sales volumes multiplied by budget metals prices of $1,600 per ounce of gold, $30
per ounce of silver, $3.50 per pound of copper, $0.90 per pound of lead and $0.90 per pound of zinc, rather than realized sales prices.
2. All Mineral Reserves and Mineral Resources have been estimated as at December 31, 2012 in accordance with the standards of the Canadian Institute of Mining,
Metallurgy and Petroleum and National Instrument 43-101 (“NI 43-101”), or the AusIMM JORC equivalent. These estimates, as well as all other scientific and technical
information relating to Goldcorp’s mineral properties contained herein, have been prepared by employees of Goldcorp, its joint venture partners or its joint venture
operating companies, as applicable, and have been reviewed and approved by Maryse Belanger, P. Geo., Senior Vice-President, Technical Services of Goldcorp, a
“qualified person” for the purposes of NI 43-101. These estimates incorporate current and/or expected mine plans and cost levels at each property. Varying cut-off
grades have been used depending on the mine and type of ore. Goldcorp’s normal data verification procedures have been employed in connection with these estimates.
For a breakdown of Mineral Reserves and Mineral Resources by category and for a more detailed description of the key assumptions, parameters and methods used in
calculating Goldcorp’s Mineral Reserves and Mineral Resources, please refer to Goldcorp’s most recently filed Annual Information Form/ Form 40-F filed with Canadian
provincial securities regulatory authorities and the U.S. Securities and Exchange Commission.
3. Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Resources: United States investors are advised that while such
terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. “Inferred Mineral
Resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred
Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other
economic studies. United States investors are cautioned not to assume that all or any part of Goldcorp’s Measured or Indicated Mineral Resources will ever be converted
into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally
mineable.
38