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Goldcorp Inc. New (Toronto: G)

July 8, 2003

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Business Summary

Goldcorp is a financially secure company, with excellent growth potential. All operations are in North America. The balance sheet has no debt and US$308 million in total liquid assets (at 31/3/03). The net cash position is stronger than most gold companies and is in fact larger than the aggregate net cash position of the World's five largest gold companies.

Goldcorp is one of North America's most profitable gold companies and pays a US$0.15 per share dividend.

Goldcorp remains completely unhedged, and by market capitalization is North America's largest unhedged gold company.

A major expansion of the Red Lake Mine will provide low, risk, value-added organic growth.

The Ultimate Value Creator

Exploration discovered the high grade gold mineralization at Red Lake and has since become the most important value driver for Goldcorp.

An understanding of the factors controlling the gold mineralization at Red Lake has improved, and Goldcorp is excited about the future potential for additional exploration success. It will continue to be a major value driver.

Red Lake Regional Exploration

As a result of the discovery of the High Grade Zone in 1995, there are now more than 30 companies from around the world, actively exploring in the Red Lake area. Goldcorp is applying the exploration model that it has used with such great success in the Red Lake Mine to the exploration program beyond the Mine.

Goldcorp currently owns more than 79,000 acres of land in the Red Lake area.

Recent News: Red Lake Mine Operations and Exploration Update On Trackt and to Possibly Exceed Forecasts - High Grade and Sulphide Zones Getting Bigger!

GOLDCORP INC. is pleased to announce an extremely encouraging start to the first half of 2003 with excellent results from both operations and exploration at their Red Lake Mine, in northwestern Ontario, Canada. The validity of the exploration model was confirmed as the latest work increased the continuity and expanded the dimensions of mineralization in all of their target areas. Construction of the new shaft is underway, and Goldcorp believes the latest exploration results highlight the potential to increase reserves and resources at the Red Lake Mine and support the expanded production rate from this new shaft for a prolonged period of time.


- The vertical extent of the Footwall Zones of the High Grade Zone (HGZ) has been increased by 450 ft (137 m) or 40%, with intersections of up to 10.52 ounces of gold per ton (opt) (360.6 grams per ton (gpt) over 2.5 feet (ft) (0.76 meters (m)).

- Multiple zones of High Grade Mineralization were again encountered in the Hanging Wall Zones of the HGZ at a depth of up to 7040 ft (2146 m). Five intersections of gold mineralization were obtained within a wider zone of mineralization totaling 360.3 ft (110 m) with grades including 1.68 (opt) (57.6 (gpt) over 33.9 ft (10.33 m).

- The vertical extent of the upper area of the Far East Zone increased by 500 ft (152 m) or approximately 50%, with intersections of up to 3.16 opt (108.3 gpt) over 9.0 ft (2.74 m).

- A previously identified new zone of High Grade Mineralization in the Hanging Wall of (i.e. lying parallel to and above) the HGZ itself was intersected again by several drill holes with grades of up to 0.96 opt (32.9 gpt) over 3.9 ft (1.19 m) confirming the potential that this mineralization could represent a significant new target area.

Fundamental Considerations: The Ultimate Gold Stock - in the company's own words

The Red Lake Mine

Production for the First Quarter March 31st 2003 was 117,339 ounces of gold at a cash cost of $74 per ounce.

High Grade reserves at Red Lake are 4.6 million ounces at an average grade of 2.35 ounces per ton.

High Grade resources are 1.2 million ounces at 2.03 ounces per ton.

Corporate - First Quarter March 31, 2003.

Gold Production: 133,743 ounces of gold at a cash cost of $99 per ounce.

Cash Flow: -$14.3 million or -$0.08 per share.

Earnings: $14.4 million or $0.08 per share.

Gold is Money - Goldcorp is Gold

Goldcorp believes that gold is money and therefore has increased the bullion inventory. As of March 31st, 2003 the gold bullion inventory increased to approximately 223,576 ounces. The gold bullion inventory has been increased in two ways: first the company held back a portion of its gold production as inventory, 3,877 ounces were held back in the first quarter. Second, the company purchased, at the end of the first quarter, 123,817 ounces of gold bullion at an average price of $322 per ounce.

A Magnificent Balance Sheet - No Debt

As of March 31st, 2003, our cash and short term investments were $233 million. Gold bullion holdings increased during the first quarter of 2003 to approximately 223,567 ounces (7.0 tons). The market value of the gold bullion holdings, based on a gold price of $334.85 per ounce, was $75 million. The market value of Goldcorp's liquid assets (cash and short term investments and gold bullion) as of March 31st 2003 was $308 million.

Paying A Dividend

On January 15th, 2003 Goldcorp announced our intention to increase our annual dividend to US$0.15 per share from US$0.12, an increase of 25%. The intention in 2003, is that shareholders will now receive dividend payments bimonthly. Bi-monthly payments will be US$0.025 per share.

Technical Considerations

The still young, but solid, up-trend of the gold price in US dollars is likely to continue.

The share price of Goldcorp has fallen by about 25% since it touched a high at Can$ 20.56, reflecting the consolidation of the gold price.

We believe that the present price level offers an excellent price appreciation potential.

Our recommendation: Buy!

Peter Zihlmann
Disclosure: The author has not been paid to write this article, nor has he received any other inducement to do so. The author is a shareholder in the company and will benefit from any increase in the company's share price. Disclaimer: The author's objective in writing this article is to invoke an interest on the part of potential investors in this stock to the point where they are encouraged to conduct their own further diligent research. Neither the information, nor the opinions expressed should be construed as a solicitation to buy or sell this stock. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions in the stock.


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Gold is the official state mineral of Alaska.
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