Dividend yield| 1.4%|
Shares O/S| 810M|
Current price| $39.11|
52 week range| $38.17-$56.31|
Valuation| Current| 2012E| 2013E| 2014E| 2015E| 2016E| EPS| $1.9| $3.46| $4.42| $4.73| $5.86| $6.38|
P/E| 20.58x| 19.52x| 19.1x| 18.23x| 17.84x| 17.54x|
EBITDA| $3.0B| $3.28B| $4.2B| $4.7B| $5.1B| $5.45B|
P/EBITDA| 4.2x| 5.1x| 6.1x| 7.5x| 7.9x| 8.3x|
SALES(per share)| $6.79| $8.2| $10.1| $12| $13.9| $16.1| P/SALES| 5.9x| 5.5x| 5.2x| 4.9x| 4.7x| 4.4x|
BV| $21.5B| $23.9B| $26.8B| $29.8B| $33.4B| $37.3B|
P/BV| 1.5x| 1.9x| 2.5x| 2.8x| 3.4x| 3.9x|
CFPS| $2.94| $3.4| $3.9| $4.5| $4.8| $5.3|
P/CFPS| 13.3x| 13x| 12.7x| 12.4x| 12x| 11.8x|
RecommendationBUY this stock during 2012 in the $38-$41 range and keep it until 2013, sell it when the price approach $59 * * |
1. COMPANY DESCRIPTION
Goldcorp Inc. is a mining company that engages in the acquisition, development, exploration and operation of precious metal sites. The company is known to be the fastest growing, lowest cost senior gold producer worldwide, operating in politically stable jurisdiction throughout the Americas. The company has been founded in 1954, employs more than 12,300 employees worldwide and is headquarter in Vancouver, Canada. Goldcorp’s strategy is to operate in politically stable areas such as Canada or Mexico where they are the leading gold producers but also in other countries such as Guatemala, Argentina, Dominican Republic and the US. As shown below a map of the company’s operations and development projects.
As you can see, the company operates three mines in Mexico, Los Filos which is currently the largest gold mine in Mexico but is expected to be surpassed in 2012 by the Penasquito mine in the North of Mexico and El Sauzal. Los Filos: This mine achieved record production in 2011 with 336,500 ounces (up 10% compared to 2010) produced throughout the year thanks to higher grades processed of 0.74 grams/ton compared to 0.67 in 2010. The cash cost per ounce of this mine increased by 9.5% since 2010 due to higher operating cost to reach $463/ounce. The explorations programs around this mine ended successfully since the proven gold reserves increased by 42% since 2010 to 7.75M ounces available increasing the future revenues and life expectancy of the mine. Penasquito: This mine is expected to produce more than 500,000 ounces of gold, 28M ounces of silver, 450 million pounds of zinc and 200 million pounds of lead annually and over a 22 years period of production. It is expected to be Mexico’s largest open pit mine. Throughout 2011, the average head grade (grams/tone collected) increased constantly from 0.31 in Q1 to 0.44 in Q4 compared to 0.27 in 2010 for the gold production the silver from 23.51g/tone in Q1 to 28.68 g/tone in Q4 and the zinc from 0.53% to 0.76%. Also the average recovery rate for sulphide ore (voluminous rock that contains minerals or components in a mode of occurrence that renders it valuable for mining) increased since 2010 for gold, silver, lead and zinc by 12.5% on average. The average price per ounce in this mine was $847 per ounce and is expected to keep decreasing in the upcoming years increasing even more the mine’s profitability.
Red Lake: Red Lake is Goldcorp top producer yielding more than 650,000 ounces of gold annually at an average price of $360.The area is a high grade zone with average mill head grade of 23.94 grams/tone and an average recovery rate of 97%. The company recently invested in...