Goldcorp Misses Guidance

In the ensuing years after the departure of Rob McEwen, investors in Goldcorp. must have demanded a change to the mill, that they should add more capacity. If you know your mining shares, the Red Lake Mine was hugely profitable operating @600tpd.

They had rebuilt the mill and added capacity to max out @ 3000tpd. A 5-fold increase in capacity. Now they're complaining about ground conditions being less than ideal. But I would venture to say that they completely abandoned grade controls in favour of hauling as much ore to the surface as possible under the assumption that this too would increase production.

Sorry to say, but they're processing a lot of barren rock for their troubles and now can no longer change their strategy, because they have to save face and will continue headlong into losses, since they have totally lost control. The temptation was far too great, and they made the mistake of believing grade controls could be discarded.

They are also causing themselves major headaches with mining engineering and mine stability by taking out the max, rather than only what they need. Same problem with Agnico.

Big is not necessarily better.

Reuters