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March 6, 2006

11:00 a.m. EST

Executives

Ian Telfer - President, CEO & Director

Randy Smallwood - Engineer

Peter Barnes - CFO

Analysts

David Stein - Sprott Securities

Navoyka Koakowictz

John Tumazos - Prudential Equity Group

Tony Lesiak - UBS Warburg Inc.

Michael Fowler - Desjardins Securities

Andrew O'Connor - Wells Capital Management

Alberta Pernaka

Chantel Gosselin - Haywood Securities

Mark Smith - Dundee Securities Corporation

David Cole - Eagle Capital

Presentation

Operator

Welcome to the year end results conference call for March 6, 2006. Your host for today will be Ian Telfer. Mr. Telfer, please go ahead, sir.

Ian Telfer

Thank you, operator. Good morning, everyone, and welcome to our 2005 earnings and results conference call. 2005 was certainly a busy year for Goldcorp. Of course, the acquisition of Wheaton River, then Bermejal, and then the announcement of the acquisition of the Placer assets; and then, ultimately, Virginia, over $4 billion was spent during the year. The goal of getting to a 2 million ounce producer has essentially been reached. In 2006, on an annualized basis, the Company should produce 2 million ounces.

In 2005 we had record earnings of $286 million, or $0.91 a share compared to $51 million or $0.27 a share the year before. In the fourth quarter, we topped $100 million just in the quarter, $0.30 a share compared to $15 million and $0.08 the year before.

Operating cash flows for the year were $466 million, or $1.48 a share, compared to $53 million or $0.28 the year before. In the fourth quarter alone, operating cash flows were $137 million compared to $22 million the year before.

Production increased to 1.1 million ounces compared to 628,000 the year before, and gold sales more than tripled to 1.3 million ounces compared to a little over 400,000 ounces in 2004.

Fourth quarter gold sales were in excess of 300,000 ounces and the cash cost was -$73.00 per ounce, compared to 2004, which was a little over 100,000 ounces with cash costs of $127. The other thing that sometimes gets forgotten in our results is during 2005, we did pay out dividends of $151 million and still maintained our cash balances, which at December 31 totaled $560 million, compared to a little over $300 million the year before.

The acquisition of Wheaton River was completed and then, of course, we've announced the Barrick Placer asset swap, which we expect will close in April, and also the closing of the Virginia acquisition during April.

Production again this year should be 2 million ounces, with cash costs of less than $150 per ounce.

Revenues jumped to almost $900 million from less than $200 million. The average price realized went from $409 last year to $452 this year, very close to the London spot gold price. Earnings from operations were up almost by a factor of five, from $86 million to $419 million. As I mentioned, earnings went from $50 million to $280 million. Total assets, the biggest jump, went from $700 million to $4 billion, so it's been a dramatic change in the Company and it's been a very exciting year for everyone.

Just commenting briefly on the operations at Red Lake. Again, they had a great year. Tons milled were similar at about 240,000 tons. Grade was up a little bit this year from 77 grams to 82 grams. Recoveries were spot on at 97% each year. Gold produced, because of the higher grade, went from 550,000 ounces to a little over 600,000 ounces.

Gold sold, because of the sale of the inventory they had on hand at the end of last year, jumped from 365,000 ounces to over 800,000 ounces. Cash costs at Red Lake went from $92 to $93. Incredible performance in a year of a rising Canadian dollar, rising energy prices, and rising labor costs.

During the year progress was made related to the underground work required to connect the new shaft to the existing mine. This development work is ahead of schedule, which will allow completion prior to the shaft reaching its full depth. The shaft advanced 700 meters in 2005, bringing it to 1.4 kilometers underground at the end of the year. On surface, the haul road has opinion upgraded, the ore loading facilities were erected, and a new shaft and related infrastructures on track to be completed by the end of 2007.

We did a study of this shaft during the year, looking at ways to optimize the value for future mine cash flows. A plan was adopted, and the revised plan now takes us to completing the depth of this shaft at 1,950 meters and connecting the underground workings from that level, what we call Level 43. The lower mine will now be completed using ramps and will be trackless, and so we still get access to the lower depths, but we will stop the shaft, as I mentioned, at 1,950 meters.

At any time in the future, if we wanted to continue this shaft down further we could do that. But again, this decision is based on what we've learned about this since the Wheaton team took it over earlier in this year.

Other parts of the project optimization include the expansion of the mill by 25% to 1,130 tons a day from 900 tons a day, and the new shaft has an ultimate hoisting capacity of 3,630 tons a day, so it will not be a constraint under the revised plan. Capital expenditures for this are $196 million, of which $96 million remains outstanding.

Just talk a little bit about the integration at Campbell and Red Lake, now that the two camps are going to be put together. Although the transaction won't close until April, meetings of technical, operational, financial, geological and administrative personnel are being held. The teams are very upbeat about possible synergies and have identified a large number of potential money-saving opportunities. Studies are underway in both camps, as the dream of combining the operations is becoming a reality. There's a real excitement among employees about becoming part of one of the few mining operations in the world that produces 1 million ounces annually. The reaction of the Placer employees at all four locations to the change of ownership has been extremely positive. We've been very impressed with their abilities, their commitment, and the desire to make this new adventure a big success.

Turning now to Alumbrera, again Alumbrera had a great year. Tons mined were similar, tons of waste were similar. Ratio of waste to ore went from 2.5 to 2.4. The grade of gold was down as had been budgeted, from 0.72 grams to 0.63 grams. Copper grade was up a little bit from 0.56% to 0.58%. Recoveries were slightly higher for gold, identically at 90% for copper, and the resultant gold produced dropped, because of the grade, from 237,000 ounces -- this is our share -- to 192,000 ounces. Copper was also down 145 down to 139, but, again, the numbers we're comparing here do exclude the first six weeks of the year, when Wheaton's a results weren't included. Some of these drops, the impact is not as large as it may sound.

The average price realized for gold went from $415 last year to $462 and, of course, the big jump was in copper from $1.36 last year to $1.94 in 2005. The impact of these higher copper prices on net cost was that, while in '04 we had negative cash costs for gold of $371, this has dropped even lower to -$643 for the year just ended at December 31.

In August, Alumbrera announced an increase in oil reserves of more than 10%, which added 0.5 million ounces of gold and 375 million pounds of copper. For us, that was about 190,000 ounces our share, and 141 million pounds of copper.

The other thing that should be noted is earnings from operations of Alumbrera are presented after depreciating the fair value of Alumbrera's assets related to the Wheaton acquisition. What this means is, the price paid for these assets by Goldcorp when it acquired Wheaton were significantly higher than what Wheaton had paid for them earlier on, and so because of this larger price, the depreciation number has increased significantly. So when comparing these numbers, you must keep that in mind.

Luismin again had a record year for the second time in a row. Tons were up. Grade was up. Production was up. Production went from 132 to 145 and, again, it is missing a part of the year. Silver went from 6.6 million to 6.7 million. Price of gold went from $410 to $448. The cash costs, again in an inflationary environment in the mining industry, went from $97 up to $119. Mill capacity during the year was increased by 30% to 2,100 tons a day; this has improved ore grades, resulting in an increase in gold production by 25% and silver by 16%. Cash costs were slightly higher because they were impacted by fuel and labor costs during the year.

The Peak Mine had an excellent year. Again, you're talking one full year and a year missing a few weeks at the beginning, but production went 139, 120; Pounds of copper, 6.3 million down to 4.6 million. Gold price was up, et cetera. Their cash costs were up a little bit, $192 to $228. But, again, the Australian currency's been very strong and the cost pressures are being felt in that country.

Interesting, if you look at earnings from operations, last year this mine earned $23 million from operations and this year it earned $17 million from operations. Keep in mind, this is a project for which we paid only $30 million. So it's been a great project for us and very, very successful. They're expanding the plant to 700,000 tons a year, and making improvements in the mills; improving processing, improving recoveries, et cetera. They were able to keep the cash costs at $228 with these improvements.

Wharf Mine I won't touch on except to say here's a mine in the United States with a head grade of a gram and recoveries of only 75% and yet, they still made money. So it's very impressive what they're doing down there. The mine will start to run out this year and then produce gold for another year after that, and we're very far along in reclaiming the land and returning it to the state in which we found it.

Silver Wheaton, of course, provided its share of earnings to Goldcorp shareholders this year. The production from both Luismin and [zinc proven] jumped from 1.6 million last year to almost 9 million this year, and the average realized silver price was quite similar in '04 and '05. Of course, it's much higher now, and because of the fixed-cost nature of these silver purchase contracts; $3.90 was the cash cost throughout the year. So the earnings from Silver Wheaton from operations were almost $20 million and, again, great impact for the Goldcorp shareholders.

Turning now to the Amapari project. The project commissioning during the fourth quarter focused on achieving design through-put rates for crushing, agglomerations, stacking, et cetera. During the fourth quarter 0.5 million tons of ore, grading 2.7 grams per ton were mined and stacked on the leach pads and placed under irrigation above 46,000 ounces. Mining of ore and free-stripping waste continued during the fourth quarter from five pits, with 3.6 million tons of waste removed and 0.5 million tons of ore mined.

During the year, 900,000 tons of ore was stacked on the leach, grading 2.54 containing about 75,000 ounces of gold and 7.4 million tons of waste per mine. The mining fleet is now fully equipped and all large haul trucks commissioned and put into production.

During the fourth quarter, commissioning continued and 25,000 ounces of gold were produced. Initial projections for Amapari estimated 20,000 ounces of gold production during 2005, to have a first gold pour occur in November, and commercial production be started during 2006. Subsequently to giving out those estimates, and because of the pace at which things were moving in Brazil and our own optimism, we accelerated both the gold pour to September and increased some of our targets for 2005. It turns out that we should have kept to our original targets, which we actually did surpass. Commercial production started at this project January 1, 2006.

At December 31, direct construction costs for the project totaled $83 million. These costs continue to be negatively impacted by a strong Brazilian currency which has appreciated 71% over the past five years and 32% since we commenced construction. This appreciation with oil and steel price increase has increased total cost by approximately $29 million above budget. During the year we also spent an additional $27 million, which were costs we had expected to spend in 2006 and future years.

During the past year, various adjustments have been made to the purchase price allocation. As we mentioned at the time, our initial estimates were preliminary and part of the review process involves consultants who specialize in advising companies on how best to allocate purchase prices. These consultants visited each project and suggested several changes to our original estimates.. During the fourth quarter, we adopted their changes, resulting in a reduction in the valuation at Amapari of $500 million and a similar increase of $500 million at Luismin. This, plus other adjustments, also resulted in a reduction of goodwill from $250 million to $150 million. This small amount of goodwill on a $2 billion transaction greatly reduces the potential for goodwill write downs in the future.

As you are all aware, all goodwill must be reviewed annually and any impairment or reduction in values will flow through the income statement and could have a dramatic negative earnings impact. Amapari operating results will be reported along with the other operations as part of Q1 2006 financials.

The Los Filos project in Mexico, again, is going extremely well. There was a number of money managers who visited the project this weekend. Hopefully they got a good impression of it. This was a project we bought from Penoles and Newmont earlier this year and this project is now being combined with the Los Filos project, which we already had a feasibility study for. This feasibility study for the combined project will be available March 31st of this year, so just a few weeks from now.

Infrastructure and development activities commenced in '05 to upgrade the existing road, power, water, supplies, et cetera, so it's going very, very well. All significant permits have now been received, and commercial production's expected to start at the Los Filos/Bermejal, which we'll now just call Los Filos, at the end of the first quarter of 2007.

Looking a bit at our expenses, depreciation jumped dramatically from $21 million to $135 million. This is of course due to the higher purchase price paid by Goldcorp when it acquired Wheaton and the much larger size of the Company. Corporate admin tripled for similar-type reasons -- a larger Company, a lot of corporate activity -- so it went from $10 million to $30 million.

In the other income column, there's a couple of items there. Interest is self-explanatory. Stock option expense, self-explanatory. Gain on marketable securities, again, we occasionally do acquire shares of companies that we think might be interesting and then, if we change our mind or decide it's not for us, then we'll sell those. We made $10 million doing that last year.

There's an item on there, $18 million for a dilution gain and, basically, this occurred when Silver Wheaton did a financing that reduced our interest in Silver Wheaton from 63% to 59%. So essentially, that is viewed as a sale, because we lost part of our holding in the company, although we didn't to anything with it. And so, our gain on the sale of that 5% is nominally $18 million, so that's why that is included in here. Our other income gave us $21 million this year.

Taxes remained relatively the same as the year before. Approximately 34% of our earnings were taxed this year. In 2004, it was about 37%. The lower tax rate is due to the fact that the Wheaton assets tend to be taxed at about 30%, where the Goldcorp assets -- the original ones -- tend to be taxed at about 40%.

Touch briefly on our reserves and resources, again we have record levels of reserves and resources. Proven and probable gold reserves have nearly tripled to 14.7 million ounces, measuring the indicated increase by 60% to almost 3 million ounces, and inferred resources are now over 7 million ounces.

On a pro forma basis, if we took the reserve and resource results put out by Placer, which will of course be combined with ours in April of this year, we would be up to 25 million ounces in reserves, measured and indicated would jump to 10 million, and inferred would jump to 12 million. If you put all those together, it gives us in all categories about 50 million ounces in reserves, resources, et cetera, so we're very pleased with that. This was a major reason for us pursuing this transaction with Placer and by putting out about 20% of our market cap, we doubled our reserves, so it was very accretive to shareholders.

I'd like to now comment about a couple of management changes taking place in the Goldcorp camp. It's now my pleasure to announce some changes. First I'd like to congratulate Peter Barnes, Goldcorp's CFO, who has so ably managed the financial side of both Wheaton and Goldcorp for the past four years throughout the rapid growth, equity financings, debt arrangements, and the employee count going from 25 people to 5,000 people, Peter has kept the Company's finances on a steady course and the financial reporting timely, informative, and transparent. While we are reluctant to lose Peter, we are pleased to announce that effective April 20, Peter will become CEO and a director of Silver Wheaton. Peter has participated in every step of the creation of Silver Wheaton and will now provide full-time leadership going forward. This is part of the evolution of Silver Wheaton, as it's market cap approaches $2 billion. As a 63% shareholder of Silver Wheaton, Goldcorp will continue to follow it closely, but a separation of leadership was due. We are sure Peter's success will continue to the benefit of Silver Wheaton and, indirectly, Goldcorp shareholders.

I'm also pleased to announce the former Placer Dome CFO, , has recently joined Goldcorp. To those not familiar with this story, Lindsay was recruited by Placer last fall and he arrived for his first day of work to learn that Barrick had commenced a hostile takeover that morning. Needless to say, the next two months were interesting and challenging for him. Lindsay's strong financial credentials include being CFO of Westcoast Transmission, a Vancouver-based energy company that was acquired by Duke Energy, a $30 billion U.S.-based corporation. Lindsay then became CFO of Duke America in Houston, and then treasurer of Duke, Inc. at their head office in the Carolinas. We welcome Lindsay back to Vancouver, and have no doubts about his ability to provide the financial leadership that Goldcorp will need in the years ahead..

The final management appointment is that of Julio Carvalho to the position of Executive Vice President, South America. Julio joined us in January of this year to take this position. Julio may be familiar to some of you, either from his role with Rio Tinto in Brazil for over 30 years or, more recently, as the President of Canico Brazil, which was just acquired by CVRD for $1 billion. Julio was instrumental in the whole Canico experience from staking, drilling, feasibility, study, permitting and, ultimately, to selling it. Julio will be based in our Rio office. and oversee our growing South American projects; Amapari, Alumbrera, LaQuata, and Pueblo Viejo. We welcome Julio to the Goldcorp team, and we are certain he has all the skills needed to guarantee our success in South and Central America. That's the end of my comments operator, so I take this opportunity to open it for questions.

Question-and-Answer Session

Operator

Thank you, sir. (Operator Instructions) Our first question comes from David Stein. Please go ahead.

David Stein - Sprott Securities

Hi, guys. Good morning. Congratulations on a good quarter again. I don't have too many questions on the finances themselves, but on the reserves and resource statement --actually, before I get into that, just quickly, when did you say the feasibility study on Los Filos was coming in?

Ian Telfer

That'll be the end of March.

David Stein - Sprott Securities

End of March, okay.

Ian Telfer

A couple of weeks.

David Stein - Sprott Securities

Okay, great. I noticed that the Nukay project has now quite a significant resource level in it, between measured, indicated and inferred. Could you go into what are the economic implications of that? Is that a project that could be going into production, in addition to Los Filos?

Ian Telfer

David, I'm turn that question over to Randy Smallwood. Randy?

Randy Smallwood

David, when we acquired Los Filos, of course Nukay came along, and it was an area that was in operation -- still is operating, a very small-scale operation. But in typical sort of Luismin fashion, we went in to have a look at this and just continued to optimize and explore. We've had some great exploration success on some of those assets. There's no doubt that there's a bit of hidden treasure in there, and we're quite happy with the success we've had so far and we're continuing the work forward on that. It will play a role.

David Stein - Sprott Securities

Is this kind of like traditional Mexican high grade, shallow underground mining?

Randy Smallwood

Most of the stuff -- most of the success we've had so far is -- yes, it's along the traditional scarns that have been mined by Nukay over the last 15 or 20 years. We've tapped into a couple of larger bodies, through both new drilling and underground development and it has stood up quite well. So, again, yes, there is some open pit potential in some of this material, but it is still pretty early stage to tell.

David Stein - Sprott Securities

Okay, great. Can you maybe comment on what's behind the dramatic increase in the inferred resources at San Dimas?

Randy Smallwood

Exploration success again. The central block area, we've had fantastic success on. There are about four or five different vein structures, or structures that have several veins within them that we've had great success in terms of stepping out on these things. There's also been some good success over -- you know, the challenge with these vein systems is developing on to them, and so we're starting to reap the rewards of two or three years of development on these things. And you look at some of these tunnel developments. These are veins that we've encountered that we weren't expecting to encounter, or they've came in stronger than what we expected.

David Stein - Sprott Securities

Lastly, on Amapari I think -- you know, at one point you were looking for 60,000 ounces in the first quarter, higher grade and all that. Would that be fair for Q1, or can you give us some guidance on what to expect in the ramp-up?

Ian Telfer

Yes. No, listen, you're absolutely right. We started off predicting 20,000 ounces and then in our excitement, we moved it up. I think we'll just have to wait and take a look at the first quarter results. It's in commercial production now, and we'll have a better idea as the first quarter unfolds as to what kind of guidance we want to give for the rest of the year.

David Stein - Sprott Securities

Okay. Fair enough. That's all for now. Thanks.

Operator

Thank you, sir. Our next question comes from [Navoyka Koakowictz]. Please go ahead.

Navoyka Koakowictz

Good morning. Navoyka Koakowictz here. A couple of questions. My first one is with respect to the reserves up from Amapari. Now, even if I account for the amount of materials placed on the leach pads, it seems that the reserve has gone down just a bit. Are you reclassifying some of the material? Are you infill drilling? Is there any reason for that?

Ian Telfer

Yes, it's based on some of our own experience, in terms of moving forward. We've also tightened up. The big difference is some of the increases in cost that we've seen there, and so we've lost a bit of reserves out of the bottom end of the grade range. And so, you know, that's kind of the big sort of material difference outside of the material that's been mined.

Navoyka Koakowictz

Okay. Can you also give us an update on what you're finding with the infill drilling at Bermejal? Any update on that?

Ian Telfer

On Bermejal itself? Yes, it's actually going very well, although with all the other activity down there and some of the success at Nukay, we've sort of slowed down on the drilling. But everything that we've done in terms of the step-out in the infill on Bermejal is actually showing that there's still potential, even beyond where we've drilled to date. The design pit is pushing the limits of the drilling, which is always a good case.

Navoyka Koakowictz

And have you found anything surprising in the metallurgy?

Ian Telfer

No, in fact, if you sit and look at the numbers and how it's come out, the run of mine recoveries have actually come in a bit better than we expected and, hence, there's been a bit more of a shift towards run of mine production from crushed leach production, overall.

Navoyka Koakowictz

Okay. And also could we just spend a little more time talking about the changes at Red Lake? Are the changes more to do with what you're finding there as far as exploration, or are you just moving the center more towards the Campbell side?

Peter Barnes

The changes that we did, it's an optimization review of Red Lake, and that was done as Red Lake stand-alone. It wasn't based on any changes of interpretation of geology. It's really getting the best bang for our buck in terms of capital and operating costs going forward. There hadn't been a review of the feasibility study since the expansion had occurred. So, hence, we looked at where we were at at a point in time, and what was most suitable for the ore body. Hence the increased mill capacity, which allows us to put a lot more of the lower grade material through ventilation, which means we have no restrictions as we move forward; and just generally making the property a lot more efficient, particularly with that trackless addition at depth.

Navoyka Koakowictz

Okay. And should we expect the production profile to be similar?

Peter Barnes

The production profile will be similar, but it all gets thrown into the year with this whole assimilation of Campbell and Red Lake. And as Ian said before, we've had a whole group of people on the site looking at all the synergies that can go on, and they have come up with a whole list of things that are now being pressure-tested by the combined teams on the properties.

Navoyka Koakowictz

Great. And I think I just need to ask the question, I was wondering whether you could walk us through some of the assumptions used in the cost allocation process, because it looks like you've made some substantial changes. Given that these numbers are in your annuals, I'm assuming they're final?

Peter Barnes

Yes, this is Peter Barnes here. They are final now. The preliminary numbers that we had in there we did just about at the time that we went through the merger. It was during Q1 and we decided not to change them until we had the final numbers. I mean, looking at the big picture, the allocation only changed in total by $100 million, which is the number that Ian said goodwill dropped by, so I actually think that's very good. We brought in independent valuation experts just to make sure that we were on the right lines because, obviously, this is a huge exercise and -- they're [Dutton Phelps], They were previously Standard & Poor's valuation group, and they were sold during the year.

We also brought in an independent accounting expert from the States to help make sure that we were totally on track. They went through all the operations. They looked at all the physical assets. They performed MPV valuations on each asset. They looked at the exploration potential on all the assets. They used an arm's-length criteria, including valuations of juniors and what ounces typically trade, and then assessing the value of the exploration potential. They looked at projections going forward -- interest rates, inflation -- and built it all into brand new models. In the end, they came up with totals which were pretty close to ours. As Ian said, we shifted valuations in between some of the assets, but not particularly overall.

Navoyka Koakowictz

Can you tell us what kind of commodity price assumptions were used?

Peter Barnes

I don't have them in front of me, but they were actually fairly conservative. They used, I think, CPM projections going forward.

Navoyka Koakowictz

Is it fair to say that the increase in allocation towards Luismin is linked to the fact that you've increased the resources there?

Peter Barnes

Well, of course, they are looking at the value as of February 15 when we bought these things. I think it is fair to say that the fact that we've had 100 years of experience at Luismin, and we have had a lot of exploration expense over the years including this year, it makes it less risky to put value there than anywhere else.

Navoyka Koakowictz

All right. Thank you.

Operator

Thank you. Our next question comes from John Tumazos. Please go ahead.

John Tumazos - Prudential Equity Group

Congratulations on all the progress. As we look out in 2006, should we expect another four acquisitions and doubling the size of the Company again? Or are you going to deliberately slow down and consolidate all of the new people and properties? Secondly, is there any gold price, now that we are around $560, that you think is too high ,where you would stop buying properties on an industry-price basis?

Ian Telfer

Thanks, John. To answer your first question, yes, we will be slowing things down. Our objective was to get to 2 million ounces, and we're now there. We never thought we'd get there that quickly. Going forward we'll be looking for opportunities, I would say like the Virginia one, something that comes into production out in the future a few years that'll help us keep our level of production steady over a long period of time. We think the challenge for the industry is just going to be replacing what you mine and so, at least keeping between 2 million and 3 million ounces, we're comfortable we can do that. So, yes, the rush is over. No more $4 billion this year. The second part of your question was related to --?

John Tumazos - Prudential Equity Group

Is there any gold price where you'd stop buying properties?

Ian Telfer

No, I think we're at the limit. I think we're at the limit. Again, the prices vary depending on the state of the property and how much people think is there. A project like Virginia, which doesn't even have a 43-101 report, while there was a great variation among the companies that looked at it as to how much was there and what it was worth and by default what were you paying per ounce. We think gold at $550 -- I don't think you'll see us putting mines into production that require $550 or anything higher just to be viable.

John Tumazos - Prudential Equity Group

Thank you.

Operator

Thank you, sir. Our next question comes from Tony Lesiak. Please go ahead.

Tony Lesiak - UBS Warburg Inc.

Good morning. Ian, could you comment on the production, maybe on a mine by mine basis? And then, particularly focus on Red Lake and how you see the production there evolving over the next few years?

Ian Telfer

Short answer, probably not. I mean, the guidance we've given for all of the mines previously is essentially intact. As Russell said, what we've said about Red Lake before, it stays. What will happen as we put the two operations together, you'll have to give us a little time to comment on that. Luismin, I think the numbers we've given out in the past are intact. Peak is intact. Alumbrera has a slightly better year this year, a little more gold this year than last year but, again, that's budgeted. That's just what the way the ore body comes out. And as I said, for Amapari, at the end of the first quarter we'll see how it goes and then we'll maybe give some guidance for the rest of the year.

All of the rest are steady state. We've -- if you add them up, those with what we know of the Placer assets -- and again, we haven't acquired them yet. We've certainly been involved in the projects now, but we see it totaling about 2 million ounces. And so, that's the best I can do for you.

Tony Lesiak - UBS Warburg Inc.

Okay. So 600,000 ounces this year from Red Lake, is that a reasonable number to assume?

Ian Telfer

That's a reasonable number.

Tony Lesiak - UBS Warburg Inc.

Was there any presentation provided during the Los Filos visit over the weekend?

Ian Telfer

Yes, there was.

Tony Lesiak - UBS Warburg Inc.

Is that available?

Ian Telfer

It certainly is. It's a lot of pictures, Tony, but we'll be happy to send it to you.

Tony Lesiak - UBS Warburg Inc.

Okay. Now, the question I have is on Alumbrera, the tax structure there. Can Peter maybe elaborate on what's happening there and when the new NPI kicks in?

Peter Barnes

Well, the new NPI kicks in, of course, it's very variable depending on what gold prices and copper prices do, but at these kind of prices, we're expecting it'll kick in mid-year. And it is deductible for tax and we see Alumbrera tax rates -- obviously the effective income tax rate is about 30% on the P&L. Cash taxes will become higher. It's probably going to be close to 40% this year in 2006.

Tony Lesiak - UBS Warburg Inc.

Final question on the hedge book. Have you bought it back yet? If you did, what did you pay?

Peter Barnes

Well, we don't pay for the hedge book. It's part of our purchase price with Barrick that we settle in cash, so that is fixed, yes.

Tony Lesiak - UBS Warburg Inc.

Okay, so you have already established the amount. Can you give us that amount?

Peter Barnes

Well, we're still finalizing the numbers, but it's fixed. It is isn't changing any more.

Ian Telfer

The price was fixed the day that Barrick got 66% of the Placer shares. From when we made the offer, the good news was the price of gold went up a lot so the value of the 25 million ounces we bought in the ground went up with it. The quality, of course, is -- and I don't have the number in front of me, but I would say that what we thought we were going to pay for that hedge book is probably up about 60%, based on the change in the gold price between the two events.

Tony Lesiak - UBS Warburg Inc.

Originally you were looking at banking about $122 million for resettling the book, right?

Ian Telfer

Around that, that's correct. So, add 60% to that and you'll be pretty close.

Tony Lesiak - UBS Warburg Inc.

Okay, great. Thanks very much.

Operator

Thank you, sir. Our next question comes from Andrew O'Connor. Please go ahead.

Andrew O'Connor - Wells Capital Management

Good morning, Ian. Gentlemen. Wanted to know, Ian, can you better describe how the overall project optimization at Red Lake, how this anticipates or incorporates the plan to integrate the Campbell mine? Is there anything else you can say which is more explicit, other than that meetings are being held between the operating personnel between Campbell and Red Lake?

Ian Telfer

At this stage, not really. We said it when we announced this transaction, we thought the synergies would amount to $30 or $40 million a year. Well, we're very comfortable with that number. That may be conservative, but time will tell. But at this stage it's too -- obviously we'll be doing everything as quickly as possible. But we have not yet taken possession of the projects yet, so it limits our abilities a little bit. But, no, it's too early to comment.

Andrew O'Connor - Wells Capital Management

Thanks very much.

Operator

Thank you, sir. The next question is from Michael Fowler. Please go ahead.

Michael Fowler - Desjardins Securities

Los Filos reserve, what's the cut of grade and what would be the breakdown of run of mine and crushed heat leach?

Randy Smallwood

Yes, Randy Smallwood here. I mean the feasibility study's going to be released at the end. In terms of the reserves and resources that we've just reported, the bottom cut-off was 0.22 gram per ton. That's sort of a round estimate, or a rough estimate of the overall, average run of mine cut-off grade applied to the reserves. And in terms of a split, about 1.5 million ounces fell into the crushed leach side, and the rest of it from the Los Filos, the rest of it's run of mine.

Michael Fowler - Desjardins Securities

Okay, thanks for that. Ian, on the allocation, when you take over the Placer assets, I presume at that time you're going to have to make an allocation for the individual assets on some sort of valuation. When do we find out about that?

Ian Telfer

Probably find out about that when we report our second quarter financials, which will be the June financials. We expect to take possession in April, so the financials will come out at the end of June, and that's the first chance you'll get a look at it. I will say this, though, of the $1.5 billion or so that we're spending, we are working diligently to reduce the goodwill on that, once again, to as small a number as possible. We think that companies that have to pile gigantic goodwill balances on their books, it's a dangerous practice. We also think the SEC is not looking upon that favorably, so we'll be trying to allocate the whole purchase price over the assets.

Michael Fowler - Desjardins Securities

Thanks for that. You don't, by the way, have to put that out in any circular?

Ian Telfer

I don't think so, no.

Michael Fowler - Desjardins Securities

Okay. Virginia gold, How much do you think there's there right now at Virginia?

Ian Telfer

When we went into it, it was our view that we think there's a minimum of 4 million ounces there. We think it's a new gold cap. I think -- speaking as a non-geologist here -- but talking to different people, I think there's a very good chance of doubling that. So, you know, we'll be doing a lot of drilling there over the next couple of years to try to determine exactly how big it is.

Michael Fowler - Desjardins Securities

Okay. Thanks very much.

Operator

Thank you. Our next question comes from [Alberta Pernaka]. Please go ahead.

Alberta Pernaka

Ian, could you please take me back to Amapari, what is it expected to produce this year?

Ian Telfer

Well, the initial guidance we gave out for it was about 180,000 ounces for the full year. But as I say, at the end of the first quarter of commercial production, if there's any changes to be made to that, we'll make them at that time.

Alberta Pernaka

Okay. Thank you.

Operator

Thank you. Our next question comes from Chantal Gosselin. Please go ahead.

Chantel Gosselin - Haywood Securities

Good morning. Just a quick question regarding Red Lake. The cost per ton you achieved in Q4 was much higher than the previous quarter. Is it reasonable to use that going forward, until the expansion is in place?

Peter Barnes

No, it varies depending on the area, Chantal, and it's just one of those things. We were in a different area that caused some of the costs to go up a bit, and we were processing refractory ore over at Campbell, as well.

Chantel Gosselin - Haywood Securities

Okay. So something more like Q3, Q2, the average for the beginning of the year? Because that was at least $50 difference.

Peter Barnes

Yes, it's down to the norm, that's for sure.

Chantel Gosselin - Haywood Securities

Okay. So what would you say for our going forward then? Just something average for the year?

Peter Barnes

Something average, that's right.

Chantel Gosselin - Haywood Securities

Okay. And secondly, I noted that the measured indicated resource, they reduced significantly and the I guess the inferred was up also. Is it just the reclassification?

Ian Telfer

Sorry, measured indicated where?

Chantel Gosselin - Haywood Securities

At Red Lake.

Ian Telfer

Corporately, as a whole? I'd say it is just basically a measure of reclassifying, bringing things up, so --

Chantel Gosselin - Haywood Securities

Well, the M&I reduced by about 600,000 ounces, but the inferred increased by 600,000 and that's about 50% reduction in M&I. is that right?

Ian Telfer

Yes, but when you look at the depletion in terms of what was mined and then the reserves, that's -- we're talking about M&I moving up into reserve status and you've got to take out the mine depletion.

Chantel Gosselin - Haywood Securities

So you added at the end on the inferred?

Ian Telfer

Right, yes.

Chantel Gosselin - Haywood Securities

Okay. Thank you.

Operator

Thank you. Our next question comes from Mark Smith. Please go ahead.

Mark Smith - Dundee Securities Corporation

Hi, guys. A couple of quick questions. Just in terms of the transaction and the closing of the transaction for Placer, who gets the cash year-to-date generated by those assets?

Ian Telfer

Yes, I know we do.

Mark Smith - Dundee Securities Corporation

You do? Okay. So that's netted out of your $1.5 billion?

Ian Telfer

I'm sorry just hang on a second. Sorry. Okay. Yes, we get the cash from November 1.

Mark Smith - Dundee Securities Corporation

From November 1. Okay. So your purchase -- so if I use it year-to-date, and then I'm just -- give you the cash year-to-date, that'd be fine, I guess? Netted out from your $1.5 billion.

Ian Telfer

That's correct.

Mark Smith - Dundee Securities Corporation

Okay. All right. And then secondly, you're looking at expanding the mill capacity at Red Lake by 25%. Is there really a need to do that when you have excess capacity at the Placer mill?

Peter Barnes

Well, just remember we made that decision before the Placer thing came along and we do have the extra ore up in the upper reaches of Red Lake that's lower grade, that once we get the new shaft in there, we can certainly move it up. We did the mill expansion, another 25%, for something like $6 million or $7 million. It was incredibly cheap to take it that one more step, and it gives us an ultimate capacity that provides a lot more flexibility on the property generally. As Ian said, we're into camp consolidation, and we have very high hopes for the Red Lake camp. By the time we get two mills maxed out and we look at other opportunities, hopefully we'll fill it all.

Mark Smith - Dundee Securities Corporation

Okay, just help me with those numbers, then. Just in terms of you're looking at, you know, 1,130 tons a day. Presumably that will grow slightly at Red Lake Mine. But the Placer mine, since they had the rock burst, the mill is significantly under capacity, as is the shaft. Can you give me an idea of how they are running on a run rate and what is the capacity of both of those assets?

Peter Barnes

I don't want to comment on how they're performing because, again, as Ian said, we don't own the property yet. But they certainly have excess capacity in the Reid shaft. They have excess capacity in the mill. And I'll just reiterate again, we have ore in the upper reaches of Red Lake that we can't get up the shaft at the moment, because we're shaft restricted, but if we can get that across the Campbell at some point in the near future, there's a good chance we'll make a big difference with filling their mill up.

Mark Smith - Dundee Securities Corporation

So that's in addition to what you'd be drawing from deeper down.

Peter Barnes

Yes.

Mark Smith - Dundee Securities Corporation

That the' good. What sort of oxygen capacity do you need to add to use their autoclave on 100% basis?

Peter Barnes

I have no idea. I'll have to find that out over the next few months.

Mark Smith - Dundee Securities Corporation

But you won't be shipping stuff down to Nevada any more, I presume?

Peter Barnes

Not if we can help it.

Mark Smith - Dundee Securities Corporation

All right. Okay. And then, Ian, you could just give me a little guidance on how you're going to pay for this acquisition, and what sort of loans you're looking at or whatever for taking this on? Or whether you'd be selling some Wheaton Silver stock?

Peter Barnes

This is Peter Barnes. First of all, I sincerely hope they won't be selling Silver Wheaton stock. Secondly, we've got approved lines of credit from banks for $1.4 billion, then we've got cash on hand, so there's no shortage of cash available.

Mark Smith - Dundee Securities Corporation

Okay, so something around $700 million or something you'll be looking at?

Peter Barnes

In terms of --

Mark Smith - Dundee Securities Corporation

Loan.

Peter Barnes

Well, no, we will probably draw a lot of the credit facilities in the short-term and then, obviously, the focus is on reducing them as quickly as we can.

Mark Smith - Dundee Securities Corporation

Okay.

Ian Telfer

But there are no plans at all for any equity to be issued or Silver Wheaton to be sold. The lines of credit and our cash on hand will cover this. Then as people are starting to come to grips with our operating cash flow this year, if gold stays where it is, we'll be in excess of $800 million U.S., so having a $1 billion worth of debt is not a big deal.

Mark Smith - Dundee Securities Corporation

Okay. Alright. Thanks a lot, Ian.

Ian Telfer

Operator, we'll take one more question.

Operator

Thank you, sir. Our final question comes from David Cole. Please go ahead.

David Cole - Eagle Capital

This is David Cole, Eagle Capital. Would you comment on what King's Bay gold may provide or may add to your results?

Ian Telfer

Hang on one sec.

Peter Barnes

King's Bay is an early stage exploration joint venture that, it's one of these -- as we like to say it, projects down the road that, with some luck and some skill, will add to the package.

David Cole - Eagle Capital

Okay. Thank you.

Ian Telfer

Okay. Thank you, operator. Thank you, everyone. Appreciate your support and we'll be speaking to you whenever the next development occurs. Take care.

Operator

This concludes today's conference call. Please disconnect your lines, and have a great day.

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Source: Goldcorp Q4 2005 Earnings Conference Call Transcript (GG)
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